Uncertainty over the Global Economy and Stagnation in Capital Investment

「Economic conditions differed by region and demand sector, while the effects of worsening conditions in the Middle East became apparent.」

「During the consolidated fiscal year, the global economy saw downward pressure on consumer spending in the United States, partly due to the impact of tariff policies, although investment in the active AI-related sector was evident. In Europe, external demand in manufacturing declined, while domestic demand remained firm. In China, the impact of the sluggish property market continued. Business conditions varied by region and demand segment, while uncertainty over the outlook persisted amid the worsening situation in the Middle East.」

「The outlook remains uncertain due to worsening conditions in the Middle East.」

「In the United States, manufacturing capital investment showed signs of weakening, partly due to the impact of tariff policies. In Europe, external demand in manufacturing declined, while domestic demand remained firm. In China, domestic demand declined under the impact of the sluggish property market, although external demand showed signs of recovery. Business conditions therefore varied by region and demand segment.」

「During the fiscal year, in the United States, appetite for capital investment related to AI strengthened, while capital investment in other manufacturing sectors showed signs of weakness. In China, exports, which had been strong, also showed signs of weakness, resulting in differing business conditions by region and demand area.」

「During the six-month period ended in the interim period, the global economy showed signs that high inflation was easing. In the United States, personal consumption showed signs of strength, while in China, exports remained solid but real estate-related activity was weak, resulting in differing business conditions by region and demand area.」

「During the fiscal year, the global economy continued to slow, although the high rate of global inflation appeared to be moderating but remained elevated, partly because of a pause in personal consumption in the services sector. Manufacturing showed differing recovery trends depending on the region and demand area. In Japan, inbound demand in the services sector continued to recover, with the number of visitors to Japan reaching a record high for a single month, while capital investment in manufacturing showed an increasing trend as overseas economies recovered.」

「During the nine-month period ended in the third quarter, demand in the services sector driven by recovering personal consumption had run its course, and the global economy was slowing. Manufacturing conditions remained weak, also affected by persistently high inflation worldwide. In Japan, inbound demand continued to recover, with the number of visitors to Japan returning to pre-pandemic levels. In manufacturing, capital investment had been restrained by the slowdown in overseas economies, but signs of recovery have emerged as investment appetite has strengthened.」

「During the six-month period ended in the second quarter, demand in the services sector expanded as personal consumption recovered, but manufacturing conditions remained weak because of persistently high inflation worldwide and lower demand caused by the economic slowdown. In Japan, inbound demand related to the services sector remained solid. In manufacturing, although the appetite for capital investment increased, overseas demand remained weak because of the slowdown in overseas economies.」

「During the three-month period ended in the first quarter, global manufacturing conditions remained weak because of persistently high inflation worldwide, but demand in the services sector was recovering. In Japan, the recovery continued, mainly in the services sector, partly because COVID-19 was reclassified as a Class 5 disease, and inbound demand also continued to recover. Manufacturing also showed signs of recovery, helped in part by the easing of semiconductor supply shortages.」

「During the fiscal year, high inflation persisted and economic stagnation was evident because of higher energy prices, particularly in Western Europe, while the services sector recovered as China's zero-COVID policy was lifted and other policy changes were implemented.」

「During the nine-month period ended in the third quarter, uncertainty over the outlook persisted because high inflation remained prolonged, energy prices rose, particularly in Western Europe, and other impediments to economic activity remained, in addition to the prolonged Russian invasion of Ukraine.」

「During the six-month period ended in the second quarter, the global economy's recovery slowed because of persistently high inflation, monetary tightening in various countries, and the impact of the Ukraine crisis. In Japan, personal consumption declined because of a renewed spread of infections during the summer, but corporate capital investment in digitalization, labor-saving measures, and other areas continued to increase.」

「During the three-month period ended in the first quarter, the global economy recovered moderately. Inflation progressed as raw material, energy, and food prices rose amid the situation in Russia and Ukraine, but consumption increased steadily as lifestyles adapted to living with COVID-19. Japan's economy also showed signs of recovery, mainly in the services sector, but the global situation, higher import prices caused by the yen's depreciation, and higher prices for goods and materials remained concerns for companies' outlooks.」

「During the nine-month period ended in the third quarter, price increases caused by supply and labor shortages became more pronounced, slowing the pace of economic recovery worldwide. In Japan, although higher raw material prices remained a concern, infections were contained compared with other countries and signs of economic activity returning to normal were evident.」

「During the six-month period ended in the second quarter, the global economy's recovery slowed as the renewed spread of COVID-19 caused supply constraints. There were also concerns over a vicious cycle in which supply constraints caused inflation, which in turn dampened consumption. In Japan, the resumption of corporate capital investment supported the economic recovery, but concerns over the impact of global supply constraints and surging international commodity prices, including crude oil, created uncertainty over the outlook.」

「During the three-month period ended in the first quarter, major economies such as the United States and China showed strong recoveries, while many emerging and developing economies continued to be affected by the COVID-19 pandemic, resulting in uneven recoveries. Japan's economy also showed a marked recovery, mainly in manufacturing, but the renewed spread of COVID-19 remained a concern for the economic outlook after the government issued a third state of emergency, mainly in major metropolitan areas.」

「During the fiscal year, the global economy was severely affected by the spread of COVID-19. Although countries sought to contain the virus and introduced emergency economic measures, the impact was prolonged by the emergence of highly transmissible variants, intensifying uncertainty over the economic outlook.」

「During the nine-month period ended in the third quarter, the global economy remained impossible to forecast. In some countries, corporate activity and economic conditions were normalized quickly as COVID-19 subsided, but the approval and supply of vaccines were delayed, the spread of infections became even more severe, and many countries in some regions went into lockdown, raising concerns over a prolonged stagnation in economic activity.」

「During the six-month period ended in the second quarter, the global economy remained impossible to forecast, as the situation in which corporate earnings and capital investment had fallen sharply because of COVID-19 had yet to improve. In Japan, although personal consumption and production showed signs of recovery after the lifting of the state of emergency, the economy remained in a difficult situation, with companies taking a cautious stance toward capital investment because of the uncertain economic outlook.」

「During the three-month period ended in the first quarter, tensions between the United States and China over trade and the Hong Kong issue continued, while economic activity stagnated because of the global spread of COVID-19, further increasing uncertainty over the economic outlook.」

「During the nine-month period ended in the third quarter, the global economy showed some temporary easing in trade issues between the United States and China, but uncertainty over the economic outlook increased because of heightened geopolitical risks arising from tensions between the United States and Iran and the slowdown in China's economy.」

「During the six-month period ended in the second quarter, uncertainty over the economic outlook increased because of prolonged trade issues between the United States and China, the slowdown in China's economy, and the UK's withdrawal from the European Union.」

「During the three-month period ended in the first quarter, uncertainty increased over the outlook for the global economy because of prolonged trade issues between the United States and China, the slowdown in China's economy, and geopolitical risks in the Middle East and on the Korean Peninsula.」

「During the fiscal year, the global economy recovered moderately overall. Although China's economy slowed against a backdrop of trade issues between the United States and China, the euro area economy recovered moderately and the U.S. economy continued to recover steadily.」

「During the nine-month period ended in the third quarter, the global economy recovered moderately overall. Although China's economy slowed against a backdrop of trade issues between the United States and China, the euro area economy recovered moderately and the U.S. economy continued to recover steadily. Japan's economy also remained on a moderate recovery track as personal consumption recovered on the back of a significant improvement in the employment environment.」

「During the six-month period ended in the second quarter, the global economy continued to expand moderately in the United States, but trade friction intensified as the United States and China imposed additional tariffs on each other, raising concerns about the impact on emerging economies that had previously benefited from China's economic expansion and achieved solid growth.」

「During the three-month period ended in the first quarter, the global economy remained uncertain, as the heightened risk of escalating trade friction stemming from U.S. protectionist policies affected uncertainty across the global economy and volatility in financial and capital markets. Japan's economy, meanwhile, remained on a moderate recovery track, with capital investment increasing and the employment environment improving against a backdrop of the government's economic policies.」

「During the nine-month period ended in the third quarter, the global economy remained on a recovery track overall. The U.S. economy continued to grow steadily against a backdrop of improved employment and income, while Europe's economy also remained solid. Although some economic indicators in China showed slower growth, the economy remained stable, supported by infrastructure investment and other factors. Emerging economies, mainly in Asia, also continued to recover moderately. In Japan, the economy grew at a somewhat faster pace, supported by strong corporate earnings and an increasing trend in capital investment, as well as solid personal consumption against a backdrop of rising share prices and broad-based wage increases.」

「During the six-month period ended in the second quarter, the global economy continued to grow moderately. In addition to solid economic conditions in both the United States and Europe, China remained firm, and emerging economies also continued to recover moderately, leaving the global economy generally solid. Japan's economy also remained on a moderate recovery track, supported by the effects of economic measures including monetary and fiscal policy and improvements in corporate earnings and the employment environment, with companies' appetite for capital investment showing signs of recovery. (Environmental industry) In the public sector, demand increased as water supply and sewerage-related facilities were renewed, while the private sector also saw brisk activity in areas such as urban development projects. However, some stagnation in capital investment remained because of uncertainty over the economic outlook.」

「During the three-month period ended in the first quarter, the global economy continued to grow moderately. In addition to solid economic conditions in both the United States and Europe, emerging economies, including China, continued to recover moderately, and the global economy remained generally firm. Japan's economy also remained on a moderate recovery track, supported by the effects of the government's economic measures and improvements in corporate earnings and the employment environment. (Environmental industry) Although activity was brisk in areas such as urban development projects, some stagnation in capital investment and other areas was also evident, reflecting uncertainty over the economic outlook.」

「During the fiscal year, the global economy slowed sharply in the first half against a backdrop of a stalled U.S. economy, concerns over a sharp slowdown in China's economy, and turmoil in financial markets caused by the Brexit (the UK's withdrawal from the EU) shock. In the second half, however, a gradual recovery progressed, supported by a recovery in the U.S. economy, support for China's economy from various policies, and the swift response of central banks in major countries to the Brexit (the UK's withdrawal from the EU) shock. Japan's economy, meanwhile, failed to emerge from its pause, with personal consumption remaining at the depressed level following the consumption tax rate increase, while capital investment and exports remained below the previous fiscal year's levels.」

「During the nine-month period ended in the third quarter, the global economy continued to grow moderately, but uncertainty increased amid concerns over the rise in protectionism following the change of administration in the United States and its global repercussions. In Japan, meanwhile, production and exports showed signs of recovery, but personal consumption remained sluggish and capital investment continued to be weak.」

「During the six-month period ended in the second quarter, corporate investment failed to grow in the United States, the turmoil surrounding concerns over the UK's withdrawal from the EU continued to weigh on Europe, and uncertainty in the global economy increased as the slowdown in China's economy became more pronounced. In Japan, meanwhile, personal consumption remained sluggish, and although the government's economic measures were approved by the Cabinet in August, business sentiment did not improve because of the yen's appreciation and uncertainty over the outlook for the global economy, and private-sector companies showed a tendency to remain cautious about capital investment.」

「China's excess debt and excess capacity problems remained unresolved, while the market was thrown into turmoil over the UK's withdrawal from the EU as the United States refrained from another interest rate hike following the one in December last year, further increasing uncertainty over the outlook for the global economy. In Japan, meanwhile, the planned increase in the consumption tax rate in April next year was postponed, and companies became more cautious in assessing business conditions amid the yen's appreciation and concerns over a slowdown in overseas economies, while the appetite for capital investment failed to increase.」