Evidently, the dynamics of food inflation have changed significantly, and understanding them is obviously important for a policy response. 3. A related question that has engaged economists has been the role, if any, of the central bank in combating food inflation. Opinion on this has spanned the entire spectrum.
In relation to the outlook for Japan's economy I just outlined, attention is needed for the time being on (1) whether services consumption will recover steadily during the COVID-19 era and (2) whether supply-side constraints will head toward a resolution on the back of continued firm recovery in overseas economies. Let me elaborate on these two points.