stable growth on the whole, as evidenced by the fact that the year - on - year gdp growth rate for the january - march quarter of 2017 increased somewhat from the previous quarter. looking forward, growth in emerging economies is expected to become solid on the back of the steady growth in advanced economies and the effects of policy measures taken by emerging economies. the latest world economic outlook ( weo ) released by the international monetary fund ( imf ) projects that the global economic growth rate will increase, registering 3. 1 percent in 2016, 3. 5 percent in 2017, and 3. 6 percent in 2018 ( chart 2 ). the bank is also monitoring developments in risk factors and their impacts on the global economy ; risks include those of the new u. s. administration's economic policy and of political situations in europe, as well as geopolitical risks. let me now turn to japan's economy. japan's exports and production have been on an increasing trend amid the global improvement mainly in the manufacturing sector and trade activity ( chart 3 [ left chart ] ). against this background, in the corporate sector, profits have been at record high levels ( chart 3 [ right chart ] ). business sentiment has been favorable on the whole, and business fixed investment has continued on a moderate increasing trend. a feature of the current economic recovery phase is that improvement in business sentiment has been widely seen, not only for firms in metropolitan areas and large firms but also for firms in local areas and small firms. the diffusion indexes ( dis ) by region for business conditions in the tankan ( short - term economic survey of enterprises in japan ) have been positive as a trend for all regions since the december 2013 survey ( chart 4 ). the dis by firm size have been well above zero for large firms as well as small firms ( chart 5 ). this was not the case with the previous economic recovery phase from 2002 through 2008 before the global financial crisis. in the household sector, japan's labor market conditions have continued to tighten steadily. the unemployment rate has declined to the range of 2. 5 - 3. 0 percent - - which is virtually full employment - - for the first time since 1994. the active job openings - to - applicants ratio has risen to 1. 48 times, the level last seen in 1974, exceeding the peak level observed in the " asset bubble " period ( chart 6 ). looking ahead, labor market conditions are expected to tighten further as the economy continues growing

bank of japan ’ s august report of recent economic and financial developments1 bank of japan, communication, 17 august 1999. * * * the bank ’ s view2 japan ’ s economy, at present, has stopped deteriorating, and corporate sentiment has seen a slight improvement recently. however, clear signs of a self - sustained recovery in private demand have not been observed yet. with regard to final demand, business fixed investment has been on a downward trend. recovery in private consumption continues to be weak on the whole. net exports ( exports minus imports ) are sluggish at present due to an increase in imports. meanwhile, housing investment has continued to recover, and public works have been rising. reflecting such developments in final demand and continued progress in inventory adjustment, industrial production has stopped decreasing. in addition, corporate and consumer sentiment has seen an improvement due to the effects of measures taken to restore the stability of japan ’ s financial system and the continued monetary easing by the bank. the improvement in corporate sentiment, however, has not necessarily stimulated business activities, because firms strongly feel that they have excess capacity and employees and their profits remain weak. meanwhile, the improvement in consumer sentiment is underpinning household expenditure even under the worsening employment and income conditions, but is not strong enough to push up overall private consumption. as for the outlook, with the progress in inventory adjustment gradually paving the way for a recovery in production, improvements in the overall financial environment partly due to the monetary easing by the bank, along with a series of economic measures taken by the government, are expected to continue underpinning the economy. moreover, the recovery of overseas economies, especially of asian economies, is likely to have a positive impact on domestic production. nevertheless, under cautious sales plans, firms are implementing further restructuring to improve their profitability. although such corporate restructuring is expected to improve productivity, it is likely, in the short run, to reduce fixed investment and discourage household expenditure through the resulting deterioration in employment and income conditions. under such circumstances, it is still difficult to expect an immediate selfsustained recovery in private demand. overall economic developments require careful monitoring in consideration of the above points. it is also important to promote structural reform in order to assure the economy ’ s sustained growth in the medium term. with regard to prices, import prices continue to rise due to the increase in international commodity prices such as crude oil prices. domestic wholesale prices are leveling off due to the progress in inventory adjustment as well as an increase in prices