MNI BRIEF:BOJ Q1 Output Gap Hits 16th Negative Reading In Row
Japan's output gap was estimated at -0.66% in Q1, the 16th straight negative reading following -0.03% in Q4 of 2023, indicating upward pressure on prices is slowing with a time lag, BOJ data showed on Wednesday.
The BOJ's estimate of the output gap, based on capital and labour stock, is smaller than the Cabinet Office's latest estimate of -1.1% in Q1 (vs. -0.4% in Q4), which is based on revised Q1 GDP data which showed a 0.7% fall q/q, or an annualized rate of -2.9%.
The central bank said Japan's potential growth rate for the October 2023 to March 2024 period was forecasted at 0.64%, up from 0.59% for the April-September 2023 period.
The Cabinet Office estimates Japan's potential growth rate to be about 0.6% for the January-March period, unchanged from the Q4 2023.