Positive and negative deviations  As I have outlined, the scenario we consider the most likely is that Japan's economy will continue its sustained expansion with a virtuous circle of growth in production, income, and spending in place. However, it should be noted that such projections are always subject to upside and downside risks, which warrant close attention.
The first risk concerns developments in overseas economies. In the United States, housing investment has been decreasing, and, with inventory levels high, the correction in the housing market is expected to continue for a while. Banks are becoming increasingly cautious in extending loans in view of disruptions in financial markets due to subprime mortgage problems.