expected to continue growing firmly. as trade activity in the manufacturing sector has stayed firm globally, advanced and emerging economies are expected to grow in a well - balanced manner. according to the april 2018 world economic outlook ( weo ) released by the international monetary fund ( imf ), the global growth rate was projected at 3. 9 percent in each of 2018 and 2019, up slightly from 3. 8 percent in 2017. b. recent developments in japan's economy next, i will discuss developments in japan's economy. japan's economy is expanding moderately, with steady growth in overseas economies as well as highly accommodative financial conditions and government spending. a virtuous cycle operating from income to spending has become stronger in both the corporate and household sectors, and the economy is in the process of shifting from growth led by external demand to more self - sustaining growth accompanied by a recovery in domestic demand. the economy recorded positive growth for the eighth consecutive quarter until the end of 2017. although it marked small negative growth in the january - march quarter of 2018, this was due to temporary factors such as unfavorable weather conditions. as relatively high economic growth has continued as a trend, the positive output gap - - an indicator of the utilization of capital and labor - - has been widening steadily. amid the growing supply - side constraints in some sectors of the economy, firms are taking measures to enhance supply capacity, such as increasing their labor force, making business fixed investment that is intended to promote labor saving and expand production capacity, and streamlining their business processes. as a result, japan's economy has maintained well - balanced growth on both the demand and supply sides. looking at developments in more detail, in the corporate sector, exports have been on an increasing trend on the back of the firm growth in overseas economies. for example, here in gunma prefecture, exports, particularly of transportation machinery, showed strength. a factor contributing to the strength in overall exports is the growth in inbound demand led by the increasing number of visitors to the world heritage site tomioka silk mill and to popular hot springs. as japan's economy has continued to grow moderately, corporate profits and business sentiment also have maintained their improving trend. while labor shortages have continued and supply - side constraints gradually have become apparent, as evidenced by delays in procurement of some components in the manufacturing sector and an increase in front - loaded orders placed in anticipation of future delays, firms are becoming more active in making business

much more akin to an exercise in risk management. as we said at the bank ’ s most recent interest rate announcement, we judge that we will need to move our policy rate up into a neutral range over time, to a point where it is not stimulating or constraining economic growth. however, the path back to that neutral range is 4 / 6 bis central bankers'speeches highly uncertain. we will watch the data as they come in, and use judgment to deal with the uncertainties and manage the associated risks. one important uncertainty that we are dealing with today is the impact of higher interest rates on highly indebted canadians. rising interest rates will mean these people will have to spend more of their income servicing debt, leaving less for other goods and services. clearly, given these elevated levels of debt, raising rates will have more of an impact on the overall economy than in the past. this is one reason why we have been gradual in our approach to raising interest rates. housing markets are adjusting not only to higher interest rates, but also to new mortgage guidelines and rules aimed directly at cooling certain housing markets. given the unique situation, we are monitoring the impacts carefully. housing activity has been a little weaker than we expected recently. mostly it is housing resales that have been soft, suggesting there may have been more froth in certain housing markets than previously thought. housing markets that were not experiencing bidding wars appear to be adjusting in line with our expectations. however, more data will help us better understand the full situation in canada ’ s housing market. a second area of intense interest is the outlook for business investment, which has been less robust than our models indicated for the past couple of years, mainly due to uncertainty about the future of the north american free trade agreement. although uncertainty remains around ratification of the new canada - united states - mexico agreement, we expect investment spending to regain momentum in 2019, especially in light of the government ’ s new accelerated capital depreciation rules. however, we must acknowledge that the future of the global trade environment is highly uncertain right now. an escalation of the us - led trade war would, of course, be a negative for the outlook, but a resolution would be a source of new lift for the global and canadian economies. given these uncertainties, we have kept interest rates unchanged at 1. 75 per cent since last october. we will remain decidedly data - dependent as the domestic and international situations evolve. conclusion it is time for me to conclude