Against the background of weak final demand, the level of inventories remains high, and the decline in industrial production is accelerating. As a result, corporate profits have further decreased, and employment and income conditions have deteriorated conspicuously as seen in the fall in wages below the previous year’s level.
Although the above indicates negative interactions of production, income, and expenditure, a further deterioration in the economy is expected to cease as the effects of the comprehensive economic stimulus package, including additional public works and the special income tax reduction, become full scale.