GDP Price Index YoY

The GDP (Gross Domestic Product) Price Index YoY is the year-on-year change in the GDP Deflator, Japan's broadest price gauge. The Cabinet Office's Economic and Social Research Institute compiles it inside the Quarterly Estimates of GDP under the 2008 SNA accounting standard. It covers all new final goods and services in Japan, priced via about 400 commodity groups where the Consumer Price Index (CPI) is one input. A positive reading means broad prices rose, the 100 level only marks the 2020 base year, and the domestic demand deflator appears alongside for comparison.

Each quarter covers three calendar months, and monthly sources are aggregated to the quarter, with missing months extrapolated. The first estimate arrives about 45 days after quarter end and the second about 70 days after, at 8:50 AM Japan time. First releases usually land in mid-May, August, November, and February, with the second ones early the next month. Each release prints nominal, real, and deflator tables plus national income (GNI), pay, final sales of domestic product, a technical note, and data from 1994.

The second estimate replaces the first as late data arrive, and the whole history back to 1994 is refreshed each quarter. Annual figures are redone every December, and base-year benchmarks recur about every five years.

Prices move with final-spending blocks, while import prices push the other way because imports are subtracted.

• Private consumption: household spending, the largest block at over half of GDP, priced with CPI-based gauges including imputed rent. It also covers indirect financial services and nonprofit institutions serving households (NPISH).
• Private housing and plant investment: wooden and non-wood homes, machinery, and nonresidential buildings at construction prices.
• Private inventories: finished goods, work in progress, materials, and wholesale-retail stocks after valuation adjustment.
• Government spending: public pay, supplies, capital wear, medical and nursing care, plus public construction at input cost.
• Exports: goods and services sold abroad, including purchases inside Japan by nonresidents, at export prices.
• Imports, deducted: goods and services bought abroad, so falling import prices lift the deflator.

The second estimate for the third quarter of 2023, released December 8, 2023, tells the story well. Real GDP fell 0.7% on the quarter and 2.9% annualized, revised down from 0.5% and 2.1%. The deflator rose 0.7% on the quarter and 5.3% on the year, with nominal GDP up 6.9% and real GDP up 1.5%.

Domestic demand prices rose only 2.6%, since nominal imports fell 12.1% while exports grew 3.8%, leaving the GDP gauge 2.7 points higher. Fiscal 2022 showed the mirror image: real growth 1.5%, nominal 2.3%, a 0.8% deflator against 3.2% for domestic demand, with nominal imports up 32.3%.

1. Nominal values: quarterly current-price values by commodity flow across 91 goods groups, split by annual ratios.
2. Component prices: price indices for about 400 categories from CPI, wholesale, construction, wage, and trade prices. Fixed-capital gauges adjust for quality change.
3. Chain-linking: real values equal nominal divided by chain deflators, using Laspeyres volumes and Paasche prices on the prior calendar year.
4. Implicit deflator: the headline gauge comes after the fact as nominal GDP divided by real GDP, times 100. For example, 600 in nominal terms over 550 in real terms gives 109.1. Against 103.5 a year earlier, that is a 5.4% rise.
5. Linking and benchmarking: years join with a one-quarter overlap, and quarters anchor to yearly totals by the Denton method. The 2020 average equals 100.
6. Year-on-year rate: the original quarters give the yearly change as this quarter over last year's quarter, minus one, times 100. Seasonally adjusted quarters serve only the prior-quarter change.