Since subsidies for environmentally friendly cars have already used a large portion of the budget and growth in reconstruction-related demand is likely to slow down from the second half of fiscal 2012 onward, we need to carefully monitor whether external demand will recover by compensating for a slowdown in domestic demand.
In addition, attention should be paid to whether ambitious business fixed investment plans will be steadily implemented and whether the moderate improving trend in employment and income conditions will be maintained. In the meantime, consumer prices (all items less fresh food; on a year-on-year basis) have so far been hovering around 0 percent in 2012.