Rising geopolitical tensions have added to short-term downside risks for Japan, but the outlook remains relatively sanguine; consumption
and investment are expected to grow in 2018 after a solid showing in the prior year. That said, Moody’s Analytics expects GDP growth will
slow to 0.8% this year, after a firm 1.6% rise last year. Last year’s pace is unlikely to continue in 2018, but growth of 0.8% is still a
meaningful gain because estimated potential output growth is between 0.5% and 1%.
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