Meanwhile, the year-on-year rate of change in the consumer price index (CPI) is currently at around 0 percent following a gradual narrowing of the negative CPI growth rates since the summer of 2009. It is expected to gradually rise to around 0.5 percent as we approach fiscal 2013, with the improvement in the aggregate supply and demand balance (Chart 1).
I declared earlier that we ended 2008 fairly unscathed from the global financial turmoil, but real risks are still lurking. Further uncertainty in the global financial markets; recessionary trends that could spread to regions beyond the developed world; and volatilities in commodity prices, particularly oil.