In addition, government spending is expected to underpin the economic activity going forward, mainly on the back of an increase in public investment accompanied by policy measures for national resilience and of spending on hosting the Olympic and Paralympic Games. The sustainability of domestic demand depends on business fixed investment.
Business fixed investment has been steady despite the slowdown in overseas economies, and this likely is attributable to an increase in investment that is relatively less susceptible to changes in overseas demand and the business cycle, including that aimed at improving efficiency and saving labor in order to deal with labor shortage, that in research and development (R&D) for growth areas, and that related to urban redevelopment projects.