Trend inflation is considered to be determined by the output gap of the economy as a whole and inflation expectations. As for the output gap, with the labor market tightening as I mentioned before, the slack has been almost absorbed. Looking at the developments since the introduction of QQE, inflation expectations have been rising on the whole, albeit with monthly fluctuations.
The external debt-to-GDP ratio is 23.7 percent as of end-September 2019, a sharp departure from about 60.0 percent in 2005, before the onset of the Global Financial Crisis (GFC). A large part of the country’s external debt remains in medium-to-long term maturity profile supporting a manageable debt repayment schedule over the medium-to-long term horizon.