According to the Bank’s estimates, the rate has recently been in the range of 0 to around 0.5 percent, and thus remains at a low level. The potential growth rate is unlikely to rise markedly in the short term, considering, for example, that the pace of firms’ accumulation of capital stock remains moderate, although business fixed investment has turned to an increasing trend.
On the other hand, the Bank’s estimates of the output gap in Japan have generally been at the neutral level of around zero recently. The output gap is also at a favorable level on an international comparison using the estimates made by the Organisation for Economic Co-operation and Development (OECD). Labor market conditions remain very tight.