The yearon-year rate of increase in the CPI, excluding the direct effects of the consumption tax hikes, is likely to follow a rising trend, reflecting factors such as the improvement in the aggregate supply and demand balance, as well as the rise in medium- to long-term inflation expectations resulting from economic recovery.
In the October 2013 Outlook Report, it is projected to reach 1.9 percent in fiscal 2015 in terms of the median of the Bank’s Policy Board members’ forecasts. As the background to this outlook for Japan’s economy and prices, overseas economies have been somewhat weak, but they are expected to pick up gradually, particularly the advanced economies.