While overseas economies as a whole are still in a deceleration phase, domestic economic activity has also been firm. Domestic demand – including private consumption, public investment, and housing investment – has been improving and this improvement has compensated for a delay in recovery in production and exports due to a slowdown in external demand.
As for the outlook, while Japan’s economy is expected to return to a moderate recovery path as domestic demand remains firm and overseas economies emerge from their deceleration phase, there is an increasing risk that a recovery in overseas economies will be delayed, which warrants attention.