This seems to indicate that with intensifying competition among firms due partly to globalization and deregulation, many firms are restraining increases in prices through improvements in productivity and various cost reduction measures. In this situation, the year-on-year rate of change in the consumer price index (CPI, excluding fresh food) has remained at around 0 percent.
However, if the economy continues to grow at a rate exceeding its potential, resource utilization, namely in labor and production capacity, will increase further. In such a situation, it is expected that supply and demand conditions for consumer goods and services will further tighten and that this will exert upward pressure on consumer prices as more firms pass on higher costs to consumers.