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japan. the bank's assessment is that japan's economy is expanding moderately, with a virtuous cycle from income to spending operating. industrial production has been on an increasing trend, reflecting the increases in demand both at home and abroad, and labor market conditions have continued to tighten steadily. as a result, the output gap - - which shows the utilization of labor and capital - - has widened steadily within positive territory. on the domestic demand side, business fixed investment has continued on an increasing trend with corporate profits and business sentiment maintaining their improving trend. according to the june 2018 tankan ( short - term economic survey of enterprises in japan ), business fixed investment plans for fiscal 2018, especially those of large enterprises, showed firms'solid stance. this is evidenced by, for example, the fact that fixed investment plans on a basis close to gdp definition saw a year - on - year increase of 8. 7 percent - - a level clearly exceeding the past average of 4. 4 percent for the june tankan surveys during the period of fiscal 2004 - 2017. turning to the household sector, housing investment has been weakening somewhat, but private consumption has been increasing moderately, albeit with fluctuations, against the background of steady improvement in the employment and income situation. exports have been on an increasing trend on the back of the firm growth in overseas economies that i mentioned earlier. on the price front, the year - on - year rate of change in the consumer price index ( cpi ) for all items less fresh food is in the range of 0. 5 - 1. 0 percent, reflecting a rise in energy prices. 2. outlook i will now look at the outlook for japan's economy during the projection period, which covers from fiscal 2018 through fiscal 2020. the economy is likely to continue its moderate expansion. domestic demand is likely to follow an uptrend, mainly against the background of highly accommodative financial conditions and the underpinnings through government spending. exports are expected to continue their moderate increasing trend along with the growth in overseas economies. reflecting this outlook, the economy is likely to continue growing at a pace above its potential in fiscal 2018. from fiscal 2019 through fiscal 2020, the economy is expected to continue on an expanding trend supported by external demand, although the growth pace is projected to decelerate due to a cyclical slowdown in business fixed investment and the effects of the scheduled consumption tax hike. looking at the medians of the policy board members'forecasts in