Japan is on course to lose its position as the world's fifth-largest economy within two years, overtaken by India and the United Kingdom at the same time.
The International Monetary Fund projected Japan's nominal gross domestic product at $4.4676 trillion in 2027 in its October World Economic Outlook, the Yomiuri Shimbun reported on the 13th. India, by contrast, is expected to reach $4.5211 trillion that year, surpassing Japan to become the world's fourth-largest economy, while the U.K. is forecast at $4.4889 trillion for fifth place.
That would leave Japan in sixth place in 2027. As recently as April, the IMF expected India and the U.K. to overtake Japan in 2029, but it has now moved that timeline forward by two years.
Weak Yen and Sluggish Growth Push Japan to No. 6
Japan's ranking in nominal GDP has been sliding since 1968, when it passed West Germany to become the world's second-largest economy. It ceded second place to China in 2010 and lost third place to Germany in 2024.
Two decades ago, Japan's nominal GDP was more than twice Germany's. Over those 20 years, Japan's GDP grew just 1.2%, while Germany's expanded 95.2%. Being overtaken by India and the U.K. in 2027 would push Japan to sixth place for the first time since 1968.
The reasons are varied. India's growth forecast for this year was revised up to 7%, with an expanding middle class and rising domestic demand driving the economy. The U.K.'s growth forecast was also raised, to 1.3%.
Japan's growth forecast, by comparison, stands at 0.7%, far below India and the U.K., and the yen's continued weakness against the dollar has weighed on its dollar-based GDP ranking. Japan's nominal GDP this year is $4.3419 trillion, still ahead of India's $4.0602 trillion, but the gap is narrowing quickly.
South Korea drew a relatively favorable assessment. The IMF revised its growth forecast for the country this year up to 3.3%, well above Japan's 0.7% and the U.K.'s 1.3%, with strong exports of semiconductors and AI-related products seen as the main driver.
South Korea ranks around 12th or 13th in the world by nominal GDP, but its growth rate is high compared with other major advanced economies. The IMF projected global growth of 3.1% this year, 0.1 percentage point higher than in July, saying rising AI-related demand offset the negative impact of surging energy prices.