Sluggish and uncertain economic conditions in Japan and overseas

「During the interim consolidated accounting period (1 October 2025 to 31 March 2026), downside risks to the global economy increased amid heightened tensions in the Middle East and other factors from late February onward. With the unstable international situation expected to continue, uncertainty over the outlook for the global economy remains high, including the risk of higher prices and supply disruptions for energy resources and petroleum-related products.」

「During the first six months of the fiscal year under review (1 October 2024 to 31 March 2025), global growth remained firm, but uncertainty over US foreign and trade policy increased. Concern was spreading over the impact of the US's increasingly protectionist policy stance on the global economy ahead, while financial market volatility increased and corporate investment decisions were also affected.」

「Global growth remained firm during the fiscal year under review. Inflation was easing in Europe and the US, and central banks began cutting rates. Although China's property market remained sluggish, government economic stimulus supported the global economy. At the same time, geopolitical risks increased as the situation in the Middle East deteriorated, warranting caution over the impact on the global economy. The Japanese economy showed signs of recovery.」

「During the first six months of the fiscal year under review (1 October 2023 to 31 March 2024), the global economy was slowing moderately. In Europe and the US, the effects of demand suppression from previous monetary tightening were intensifying, but discussion of rate cuts had begun as the likelihood of achieving inflation targets increased. In China, expanded government fiscal spending supported the economy, but the prolonged slump in the property market, which accounts for a large share of GDP, kept the recovery slow. In Japan, the economic recovery stalled due to continued consumption restraint caused by high prices and the effects of the Noto Peninsula Earthquake and irregularities in automobile certification.」

「During the first three months of the fiscal year under review (1 October 2023 to 31 December 2023), global growth remained below its pre-COVID-19 pace. The outbreak of the Israel-Hamas conflict made the international situation even more unstable, with impacts beginning to emerge on supply chains and elsewhere. Persistent inflation continued in Europe and the US, while the effects of monetary tightening in curbing demand grew stronger. In China, although the government implemented economic measures, the prolonged slump in the property market, which accounts for a large share of GDP, kept the pace of recovery slow. In Japan, goods exports declined due to the slowdown in overseas economies, while high prices affected consumption, causing the recovery to pause.」

「Global growth during the fiscal year under review was below its pre-COVID-19 pace. In Europe and the US, policy rate hikes were approaching their final phase, but persistent inflation continued. In addition, the demand-suppressing effects of monetary tightening were beginning to spread to the real economy. In China, the economy showed signs of recovery following the lifting of the zero-COVID policy and the government's economic measures, but the recovery remained moderate against the backdrop of a sluggish property market and weak employment conditions, particularly among younger people.」

「Overall, during the first nine months of the fiscal year under review (1 October 2022 to 30 June 2023), global growth remained below its pre-COVID-19 pace. The European and US economies were slowing against the backdrop of persistent high inflation, rapid monetary tightening and more cautious lending by banks. China's economy was recovering as activity picked up following the lifting of the zero-COVID policy, but the recovery remained moderate due to weaker exports, a sluggish property market, and weak employment and income conditions.」

「During the first six months of the fiscal year under review (1 October 2022 to 31 March 2023), global growth remained below its pre-COVID-19 pace. In addition to high inflation and monetary tightening, which slowed growth in Europe and the US, bank failures and concerns over bank management in March 2023 raised concerns about financial system instability. Meanwhile, China gradually recovered as economic activity picked up after the easing of the so-called zero-COVID policy from December 2022.」

「During the first three months of the fiscal year under review (1 October 2022 to 31 December 2022), global growth generally slowed. High inflation and monetary tightening were behind the slowdown in Europe and the US. Inflation rates in Europe and the US remained high, at close to 10%, and the US Federal Reserve and the ECB continued to raise interest rates to curb high inflation. China eased its COVID-19 restrictions, the zero-COVID policy, from December 2022, but a rapid increase in infections became a downside factor for economic activity.」

「During the first nine months of the fiscal year under review (1 October 2021 to 30 June 2022), global growth slowed as high prices and the situation in Ukraine weighed on the economy. Energy prices remained high following economic sanctions imposed on Russia by European and other countries, and adverse effects on the global economy, including restrictions on exports and imports, suspension of local business operations and production, and logistics delays, became apparent. US growth slowed, partly due to accelerated rate hikes by the Federal Reserve in response to inflation at its highest level in about 40 years. China's growth also slowed as consumption weakened after strict infection-control measures were imposed in some regions while the zero-COVID policy remained in place.」

「During the first six months of the fiscal year under review (1 October 2021 to 31 March 2022), the invasion of Ukraine launched by Russia in February caused global economic and geopolitical risks to rise sharply. The US, Europe and other countries imposed economic sanctions on Russia, and energy prices rose further. Various effects, including restrictions on exports and imports, suspension of local business operations and production, and logistics delays, had already begun to emerge, and concern grew over further adverse effects on the global economy amid views that the situation could not be resolved quickly. However, during the six-month period, the global economy generally maintained its recovery trend. Although the rapid spread of the Omicron variant temporarily constrained the normalization of economic activity, prices rose at historically high rates, particularly in Europe and the US, as demand recovered. The US inflation rate reached its highest level in about 40 years, and the FOMC decided to raise its policy rate in March. China saw increasingly evident signs of slowing consumption and production as it maintained its zero-COVID policy and adopted strict infection-control measures after infections spread in urban areas and elsewhere. In Japan, as new infections rose in what was known as the sixth wave of COVID-19 from the start of 2022, people curtailed outings significantly and related consumption declined again. Although production was recovering, supply disruptions for components and semiconductors constrained production in some industries, including automobiles. Exports were showing signs of recovery, mainly to Asia.」

「During the first three months of the fiscal year under review (1 October 2021 to 31 December 2021), economic activity was moving toward normalization through November, but the highly transmissible Omicron variant spread from December, causing new infections to surge, particularly in Europe and the US. Supply disruptions for components and rising prices also continued to weigh on the economic recovery.」

「During the first nine months of the fiscal year under review (1 October 2020 to 30 June 2021), the global economy maintained its recovery trend from the COVID-19 crisis. Although infections continued to spread, economic activity gradually resumed in developed Western countries from April as vaccinations progressed. US consumption recovered strongly against the backdrop of generous fiscal support and widespread vaccination, and GDP was believed to have reached a level above that before the COVID-19 crisis. China remained firm as domestic demand continued to increase with policy support and exports, including to the US, rose sharply. Although Europe's economic downturn from the COVID-19 crisis was relatively severe, restrictions were gradually lifted as vaccinations spread, and economic activity was moving toward normalization. In Japan, repeated declarations of a state of emergency were issued from January due to the spread of COVID-19, and the economy continued to show weak recovery capacity, mainly in domestic demand.」

「During the first six months of the fiscal year under review (1 October 2020 to 31 March 2021), the global economy saw stronger restrictions on activity as the spread of COVID-19 accelerated. Some countries gradually resumed economic activity as vaccinations progressed, and the global economy as a whole appeared to remain on a recovery trend from the COVID-19 crisis. In the US, consumption, which accounts for 70% of GDP, maintained an upward trend against the backdrop of additional fiscal support and progress with vaccinations. China remained firm as domestic demand continued to increase with policy support and exports of electrical products supporting global digitalization rose sharply. In contrast, the European economy declined as the spread of infections caused by variants forced lockdowns to continue. The Japanese economy also weakened, mainly in domestic demand, due to the spread of COVID-19.」

「During the first three months of the fiscal year under review (1 October 2020 to 31 December 2020), the global economy saw renewed restrictions on activity as the spread of COVID-19 accelerated and new variants were identified in various regions. The Japanese economy also weakened, mainly in domestic demand, as the spread of COVID-19 accelerated.」

「From October to December 2019, the global economy was expanding moderately, but global economic activity contracted sharply from January through April 2020 due to the spread of COVID-19. Economic activity has been gradually resuming in countries since May, but the pace of recovery has remained moderate. In the US, new infections surged in June as economic activity resumed. Although Europe had passed the worst phase, new infections continued to occur and economic activity remained at a low level. In China, economic activity, led by domestic demand, began to recover ahead of Europe and the US, as the impact of the outbreak was relatively limited for the time being. The Japanese economy also entered a deep recession due to the spread of COVID-19 in Japan and overseas.」

「During the first six months of the fiscal year under review (1 October 2019 to 31 March 2020), the global economy recovered moderately from October through December 2019, but the impact of COVID-19 expanded from January 2020. Economic activity contracted in the US, and employment fell sharply. In Europe, business sentiment, particularly in Southern Europe, deteriorated to levels below those seen during the global financial crisis. Although China appeared to have passed the worst phase of the outbreak, its economy contracted as economic activity was suspended after the Lunar New Year. Countries introduced large-scale fiscal measures and monetary easing to support corporate liquidity, provide liquidity to financial markets, and support employment and livelihoods. The Japanese economy is expected to have entered a deep recession due to the spread of COVID-19 in Japan and overseas, in addition to the effects of the consumption tax increase.」

「During the first three months of the fiscal year under review (1 October 2019 to 31 December 2019), the Japanese economy maintained a moderate recovery trend overall despite the reactionary decline following the consumption tax increase and the effects of typhoon damage. Overseas economies slowed moderately. In the US, trade policy uncertainty eased somewhat after the US-China trade talks reached a Phase One agreement, but the economy continued to slow, mainly in exports and capital investment. The European economy recorded low growth, particularly in Germany, due to weaker external demand. In emerging markets, China's growth slowed against the backdrop of weaker external demand and slower domestic demand, while other emerging economies generally continued to slow.」

「During the fiscal year under review (1 October 2018 to 30 September 2019), overseas economies slowed somewhat due to the intensification of the US-China trade conflict, while the Japanese economy recovered moderately, led by domestic demand.」

「During the first nine months of the fiscal year under review (1 October 2018 to 30 June 2019), the Japanese economy recovered moderately, led by domestic demand, despite weakness in exports and production. Companies became somewhat more cautious about investment as exports and production declined and uncertainty over the outlook increased due to the US-China trade conflict and rising tensions in the Middle East stemming from the US hard-line stance. Exports weakened, mainly to Asia, against the backdrop of these international developments, a slowdown in overseas economies including China, and an adjustment in semiconductor-related demand. Overseas economies slowed moderately.」

「During the first six months of the fiscal year under review (1 October 2018 to 31 March 2019), the Japanese economy recovered moderately, led by domestic demand, despite weakness in exports and production. Consumption increased slightly against the backdrop of improved employment and income conditions. Although companies became somewhat more cautious about investment as exports and production declined, capital investment remained firm because demand for automation and labor-saving investment to address labor shortages and for IT investment remained strong. Exports weakened, mainly to Asia, against the backdrop of a slowdown in overseas economies, including China, and an adjustment in semiconductor-related demand. Overseas economies slowed moderately. In the US, growth in consumption and exports slowed due to the US-China trade conflict and the fading effects of previous tax cuts. European growth slowed mainly due to weaker external demand. In emerging markets, China slowed due mainly to the US-China trade conflict, while other emerging economies also showed stronger signs of slowing.」

「During the first three months of the fiscal year under review (1 October 2018 to 31 December 2018), the Japanese economy recovered moderately, although financial markets became unstable toward the end of December and the yen strengthened and stock prices fell. Consumption increased slightly against the backdrop of improvements in employment and income conditions. Capital investment remained firm as demand for automation and labor-saving investment to address labor shortages and for IT investment remained strong. Exports weakened, mainly to Asia, as the adverse effects of the US-China trade conflict became apparent. Overseas economies slowed moderately. US consumption remained firm against the backdrop of favorable employment conditions and improved consumer sentiment, but European growth slowed mainly due to weaker external demand. In emerging markets, China slowed somewhat mainly due to the US-China trade conflict, while other emerging economies also showed stronger signs of slowing.」

「During the first nine months of the fiscal year under review (1 October 2017 to 30 June 2018), the Japanese economy continued to recover moderately. Consumption increased moderately against the backdrop of improvements in employment and income conditions. Capital investment remained firm, supported by a growing sense of shortages of equipment and automation and labor-saving investment to address labor shortages. Exports to Asia increased as global demand for ICT-related products and components recovered, while exports to Europe and the US also remained firm, particularly for transport equipment. Although uncertainty over the outlook increased due to factors including the US shift toward protectionism, overseas real economies generally remained firm.」

「Although financial markets have become unstable amid growing uncertainty over the outlook due to factors including the US shift toward protectionism, real economies overseas have generally remained firm. The US economy maintained firm consumption as favorable employment conditions and consumer sentiment continued to improve. The European economy continued to grow at an annualized rate in the mid-2% range, supported by improved employment conditions. China remained firm, while other emerging economies maintained a moderate recovery trend.」

「During the first three months of the fiscal year under review (1 October 2017 to 31 December 2017), the Japanese economy continued to recover moderately. Consumption continued to improve against the backdrop of better employment and income conditions and the wealth effect from rising stock prices. Capital investment remained firm, supported by a recovery in production, increased automation and labor-saving investment to address labor shortages, and expanded IT investment. Exports continued to increase, mainly to China and other Asian markets, as global demand for ICT-related products and components recovered. Overseas economies generally continued to expand. China remained firm, while other emerging economies continued to recover moderately. The US economy maintained firm consumption against the backdrop of favorable employment conditions and improved consumer sentiment, and a major tax-cut bill was passed by Congress in December. The European economy maintained an annualized growth rate of around 2% as employment conditions and corporate sentiment improved.」

「During the fiscal year under review (1 October 2016 to 30 September 2017), the Japanese economy continued to recover moderately. Consumption recovered against the backdrop of improvements in employment and income conditions and the wealth effect from rising stock prices. Capital investment remained firm, supported by a recovery in production, improved corporate earnings, increased automation and labor-saving investment to address labor shortages, and expanded IT investment. Overseas economies generally continued to expand.」

「During the first nine months of the fiscal year under review (1 October 2016 to 30 June 2017), the Japanese economy continued to recover moderately. Consumption followed a recovery trend against the backdrop of improvements in employment and income conditions. Capital investment remained firm, supported by a recovery in production, improved corporate earnings and increased IT investment. Exports increased, mainly to China and other Asian markets, as the global IT cycle improved. Overseas economies generally continued to recover. In emerging markets, China maintained a firm growth rate, while other emerging economies continued to recover moderately. The US economy maintained firm consumption, supported by favorable employment conditions and improved consumer sentiment. The European economy recovered moderately against the backdrop of improved employment conditions and a recovery in corporate sentiment.」

「During the first nine months of the fiscal year under review (1 October 2016 to 31 March 2017), the Japanese economy continued to recover moderately. Consumption maintained its recovery trend against the backdrop of improvements in the income environment and other factors. Capital investment continued to expand, supported by a recovery in overseas demand and strong corporate investment appetite, particularly for information technology, while exports also increased, mainly to China and other Asian markets. Overseas economies generally continued to recover, although conditions varied by region. China maintained a broadly flat growth rate, while emerging economies recovered moderately as resource prices stabilized. The European economy had yet to fully emerge from stagnation, but consumption continued to recover. The US economy maintained firm consumption, supported by favorable employment conditions and improved consumer sentiment.」

「During the first six months of the fiscal year under review (1 October 2016 to 31 December 2016), the Japanese economy recovered moderately. Consumption remained weak due to higher fresh food prices and concerns about the future, particularly among middle-aged and older people, while capital investment remained firm against the backdrop of a recovery in external demand. In addition, the yen weakened sharply and stock prices rose significantly following the US presidential election in November, improving corporate sentiment, particularly in manufacturing. Overseas economies generally showed signs of recovery. In emerging markets, China maintained a broadly flat growth rate, while other countries maintained a moderate recovery trend as inflationary pressures eased. The US economy maintained firm consumption, supported by favorable employment conditions and the wealth effect from rising stock prices. The European economy continued to recover in consumption but remained unable to fully emerge from stagnation.」

「During the fiscal year under review (1 October 2015 to 30 September 2016), the Japanese economy remained sluggish in its recovery. Consumption remained weak due to subdued stock prices and concerns about the future, particularly among middle-aged and older people. Capital investment increased only modestly, weighed down by the deterioration in corporate earnings caused by the stronger yen and uncertainty over overseas economic conditions. Overseas economies generally lacked strength.」

「Consumption remained weak as sentiment deteriorated amid instability in financial markets caused by a growing global risk-averse stance, as well as the Kumamoto Earthquake. Capital investment increased only modestly, weighed down by concerns that the stronger yen would hurt corporate earnings and by uncertainty over overseas economies. Overseas economies lacked strength overall, and uncertainty over the outlook increased.」