ance with
extraordinary rapidity to the rank of second most powerful economy in
the world. One notable characteristic of the economy is the working
together of manufacturers, suppliers, and distributors in closely knit
groups called keiretsu. A second basic feature has been the guarantee
of lifetime employment for a substantial portion of the urban labor
force; this guarantee is slowly eroding. Industry, the most important
sector of the economy, is heavily dependent on imported raw materials
and fuels. The much smaller agricultural sector is highly subsidized
and protected, with crop yields among the highest in the world.
Usually self-sufficient in rice, Japan must import about 50% of its
requirements of other grain and fodder crops. Japan maintains one of
the world's largest fishing fleets and accounts for nearly 15% of the
global catch. For three decades overall real economic growth had been
spectacular: a 10% average in the 1960s, a 5% average in the 1970s,
and a 4% average in the 1980s. Growth slowed considerably in 1992-95
largely because of the aftereffects of overinvestment during the late
1980s and contractionary domestic policies intended to wring
speculative excesses from the stock and real estate markets. Growth
picked up in 1996, largely a reflection of stimulative fiscal and
monetary policies as well as low rates of inflation and social
disorder. As a result of the expansionary fiscal policies and
declining tax revenues due to the recession, Japan currently has one
of the largest budget deficits as a percent of GDP among the
industrialized countries. The crowding of habitable land area and the
aging of the population are two other major long-run problems.

GDP: purchasing power parity - $2.85 trillion (1996 est.)

GDP - real growth rate: 3.6% (1996)

GDP - per capita: purchasing power parity - $22,700 (1996 est.)

GDP - composition by sector:
agriculture: 2%
industry : 41.5%
services: 56.5% (1995)

Inflation rate - consumer price index: 0.3% (1996)

Labor force:
total: 67.23 million (March 1997)
by occupation: trade and services 50%, manufacturing, mining, and
construction 33%, utilities and communication 7%, agriculture,
forestry, and fishing 6%, government 3% (1994)

Unemployment rate: 3.4% (1996)

Budget:
revenues: $528 billion
expenditures: $673 billion, including capital expenditures (public
works only) of about $75 billion (FY97/98 est.)

Industries: among world's largest and technolog