Sanctions have been highly uncertain, as EU Council members were supposed to fine each other via lengthy procedures involving discretionary steps that would lead to theoretically large, but actually unlikely, pecuniary sanctions. Reforms such as the interest bearing deposits and the European semester aim at tackling the first problem.
Concerning risks to the outlook, the course of COVID-19, including variants, and its impact on domestic and overseas economies continue to warrant attention. In addition, there are extremely high uncertainties over the situation surrounding Ukraine and the associated developments in commodity prices, global financial and capital markets, and overseas economies. Meanwhile, Japan's financial system has maintained stability on the whole.