Thus, the rebasing is likely to cause the year-on-year rate of change in the CPI to be revised downward. Although there are some points that should be kept in mind, as described earlier, Japan’s economy is expected to return to a sustainable growth path with price stability in the longer run.
However, inflation has run persistently well below the central bank’s 2 percent inflation target. Given the relative openness of Sweden’s economy, moving the inflation rate back up to target has been greatly complicated by the sensitivity of Sweden’s exchange rate and financial conditions to developments in the euro area, where domestic economic conditions are consistent with much more accommodative policy.