Going forward, Japan’s economy is likely to continue on a moderate expanding trend, despite being affected by the slowdown in overseas economies for the time being. Risks to the outlook are skewed to the downside, particularly regarding developments in overseas economies, including the consequences of protectionist moves, developments in the Chinese economy, and the degree of progress in global adjustments in IT-related goods.
On the price front, the year-on-year rate of change in the consumer price index (CPI) has been positive but has continued to show relatively weak developments compared to the economic expansion and the labor market tightening. Recently, however, firms increasingly have reflected rises in prices of raw materials and personnel expenses in their prices.