The risk of an overall and sustained decline in prices is judged as not significant at present. However, the level of corporate profits is expected to be lower than that prior to the COVID19 outbreak, and the employment and income situation is likely to remain weak for the time being.
This is because it is more likely to take time for the economy to recover, mainly for the nonmanufacturing industry, due to the recent resurgence of COVID-19. In addition, a decline in actual prices is prone to have stronger effects on people's perception of prices in Japan than in the United States and Europe, given that Japan suffered from prolonged deflation.