While the economy is likely to be affected from next year onward by the front-loaded increase and subsequent decline in demand prior to and after the two scheduled consumption tax hikes, it is likely to continue growing at a pace above its potential – which is considered to be around 0.5 percent – as a trend, as a virtuous cycle among production, income, and spending operates.
In terms of the median of the Bank’s Policy Board members’ forecasts of the growth rates, this is 2.8 percent for fiscal 2013, 1.3 percent for fiscal 2014, and 1.5 percent for fiscal 2015, averaging almost 2 percent (Chart 16).