TOKYO (MNI) – Japan’s output gap indicating the degree of
oversupply and slack demand widened to -3.1% in the July-September,
worsening from -2.1% in Q2 and posting the worst figure since -3.1% in
Q4 of 2011, the Cabinet Office said on Thursday.
The negative output gap expands when gross domestic product growth goes
below the economy’s potential growth rate, which is estimated by the Bank of
Japan to be around 0.5%.
Japan’s economy fell a real 3.5% at an annualized rate in the third
quarter of 2012, marking the first contraction in three quarters and
the largest drop since -8.0% in Q1 of 2011, when the earthquake disaster
hit the northeastern region, causing a major supply chain breakdown and power
shortages.
The output gap is believed to influence consumer prices with a lag
of six to 12 months.
Japan’s output gap had been improving gradually after hitting the
recent bottom of -7.9% in Q1 of 2009 at the height of the global
financial crisis.
–email: skodama@mni-news.com
–email: msato@mni-news.com
[TOPICS: MAJDS$,M$A$$$,M$J$$$]
