In manufacturing, the capital utilization ratio also improved rapidly when firms faced a frontloaded increase in domestic demand prior to the consumption tax hike (Chart 11). Some firms had to postpone exports in order to prioritize domestic demand. C.  Will the balanced output gap lead to immediate economic growth constraints?
Now that the output gap is almost balanced in Japan, the next issue is whether this condition will impose a constraint on economic growth by creating a shortage in labor and capital stock across nearly all sectors and firms. I would first like to touch on this issue from the short- and medium-term point of view.