First, there is a risk that domestic private consumption will weaken because of a continuous decline in real disposable income and a potential deterioration in household sentiment. Second, there is a risk that heightened uncertainty regarding the outlook for the global economy and the tepid pace of the domestic economic recovery will result in lower exports and domestic business fixed investment.
Third, households’ and firms’ medium- to long-term growth expectations may not rise if there is no progress in implementation of the government’s growth strategy or firms’ efforts to boost competitiveness. In my assessment on risks to prices, the risks remain tilted somewhat to the downside. In particular, I am paying close attention to the movements of households’ and firms’ mediumto long-term inflation expectations.