Nevertheless, a temporary slowdown in economic recovery is likely as the various effects of fiscal tightening will be seen most strongly between now and summer. The Bank, however, is also of the view that the current trend of recovery is likely to be maintained owing to the recent strengthening of the virtuous circle in the economy.
In this respect, the Bank will continue to monitor closely economic developments, especially consumer behavior. Turning to recent price developments, it has become increasingly clear that prices have stopped declining since the end of 1996, following an improvement in the domestic supply and demand conditions and a rise in import prices.