Japan Chemical Trading Blog
Japan’s Output Gap Narrowed
On May 23, the Cabinet Office of Japan announced that the Output gap (GDP gap) in the Q1 of 2014 recorded -0.3%, reduced the negative value from -1.6% in the Q4 of 2013.
The output gap of Japan has been negative after the failure of the Lehman Brothers for 23 consecutive quarters from the Q3 of 2008. However, the negative gap has been the smallest in the past 23 quarters.
A negative output gap indicates that demand is not sufficient for domestic supply.
Although a significant reduction in the negative gap is a good trend, it may be merely because of the last-minute demand due to the consumption tax increase in April. I will continue to pay attention to the Q2 data this year.
The following table shows the transition in the output gap since the Q1 of 2008.
|2008 Q1||Q2||Q3||Q4||2009 Q1||Q2||Q3||Q4|
[table “7” not found /]
Source: Website of Cabinet Office of Japan