Largely as a result of a worsening external environment, growth has declined and the economy is set to contract in 2009 before recovering in 2010. Headline inflation is projected to ease as energy and food prices fall, economic slack increases and import prices decelerate.

4 March -
Norio Hattori is the new OECD ambassador for Japan. He succeeds Shinichi Kitajima.

4 March -
Wolfgang Petritsch takes up his post as new ambassador for Austria succeeding Ulrich Stacher.

A slowdown in net exports and investment is expected to result in GDP growth decelerating from almost 3.5% in 2007 to about 2.5% in 2008 and 2009. Headline inflation is projected to temporarily move above 2% in the short term on account of rising oil and food prices.