Global Macroeconomic Downturn and Geopolitical Risks

「Although some countries and regions showed weakness, the global economy as a whole remained on a moderate recovery path. At the same time, uncertainty about the outlook increased further because of higher energy prices resulting from worsening conditions in the Middle East and supply chain disruptions caused by supply constraints.」

「At the same time, concerns about a recession strengthened rapidly because of uncertainty over U.S. tariff policy and worsening conditions in the Middle East. Close attention remains necessary to the impact of U.S. tariff policy on supply chains and developments in geopolitical risks.」

「The outlook is expected to remain uncertain because of heightened geopolitical risks, including a review of U.S. trade policy following the change in the U.S. administration, the situation in the Middle East and the prolonged invasion of Ukraine by Russia.」

「During the current interim consolidated accounting period, the global economy began to show positive signs, including resilient domestic demand in the United States and some emerging economies and signs of recovery in consumer spending in other countries and regions as the surge in prices eased and real wages rose. However, downside risks remained, including energy-price volatility caused by heightened geopolitical tensions in the Middle East and trade disruptions resulting from global fragmentation, leaving the outlook uncertain.」

「Geopolitical risks have increased further, including the prolonged invasion of Ukraine by Russia and heightened tensions in the Middle East, adding to uncertainty about the outlook.」

「In addition, geopolitical and economic-security risks, including Russia’s invasion of Ukraine, the Israel-Hamas conflict and tensions between the United States and China, have increased, resulting in generally difficult business conditions amid an uncertain outlook.」

「During the first nine months of the current fiscal year, the global economy was on a moderate recovery path in some major countries, supported by resilient service sectors and strong labor markets. Nevertheless, the outlook remained uncertain because of monetary tightening and inflation, Russia’s prolonged invasion of Ukraine and the deepening property downturn in China.」

「During the first six months of the current fiscal year, the global economy began to show some positive signs, including moderate growth in emerging markets, a recovery in economic activity in China and a pause in the sharp rise in resource prices such as energy and food. However, downside risks remained, including weakening domestic demand due to the continued effects of monetary tightening and the prolonged invasion of Ukraine by Russia, leaving the outlook uncertain.」

「Amid these economic conditions, the prolonged downturn in major economies caused international logistics to remain generally weak because of production cuts in automobiles, electronic equipment and other products. The tight supply-demand conditions in air and ocean transportation that had continued since the previous year also eased substantially, and the supply-demand balance changed.」

「The economic outlook is expected to remain uncertain, given the deterioration in business sentiment caused by prolonged monetary tightening to combat inflation in advanced economies, higher energy and security risks resulting from Russia’s prolonged invasion of Ukraine, and rising geopolitical risks surrounding the Taiwan Strait.」

「Advanced economies that had driven the recovery of the global economy after COVID-19 came to an abrupt halt, and the risk of a global economic recession increased further from the previous fiscal year, leaving the outlook uncertain.」

「Trade friction between the United States and China and their struggle for technological dominance have intensified in recent years, creating continued uncertainty that could weigh on trade and manufacturing growth. Geopolitical risks arising from conflicts, particularly in Asia, Eastern Europe and the Middle East, have also increased.」