The Bank expects the year-on-year rate of increase in the consumer price index (CPI; excluding fresh food, on a nationwide basis) to rise gradually with the output gap remaining positive and expanding at a moderate pace while downward pressure from declining unit labor costs (labor costs per unit of output) weakens.
If, in contrast with past experience, productivity keeps rising with wage increases lagging behind in spite of the prolonged economic expansion, there may be no upward shift in the inflation rate.