With yesterday’s release of 2021Q4 GDP data, our set of statistical filters for estimating the output gap are suggesting that the output gap may be shifting into positive territory. This suggests excess capacity built up during the COVID-19 pandemic has reduced and inflationary pressures are beginning to build. SARB estimates, on the other hand, continue to imply lingering disinflationary pressures. You can read more about output gap estimation using our suite in our previous post.
