As supply capacity has expanded in Japan along with the structural change of a continuous expansion of business fixed investment, there is the possibility that a moderate increase in the potential growth rate will be induced hereafter, with some time lag.
Looking at recent developments in the potential growth rate, while the contribution of labor input has been decreasing, that of capital stock and total factor productivity (TFP) has started to bottom out (Chart 13). The expansion of business fixed investment, which has continued for the past three years, is starting to induce a supply-side structural change.