The supply and demand gap in Japan for the year 2025 is projected to be positive for the first time in two years, although current estimates show a slight negative gap.
According to estimates from the Cabinet Office, Japan's supply and demand gap for the calendar year 2025 is expected to show a slight positive figure of 0.3%, equivalent to around 2 trillion yen. This represents the first time in two years that the gap has turned positive, indicating that the overall economic demand is expected to marginally exceed the potential supply capacity. The government considers the supply and demand gap as one of the four crucial indicators for assessing the escape from deflation, having fluctuated between positive and negative values over the past few years, with a positive gap from 2015 to 2019, followed by a negative trend from 2020 to 2022.
