By contrast, considering the possibility that concern about the outlook for the fiscal situation is causing a decline in households’ and firms’ propensity to consume, a clear path toward fiscal consolidation may in fact heighten economic growth over a relatively long term. II.
The Bank’s conduct of monetary policy  The price stability goal in the medium to long term I will now explain the Bank’s conduct of monetary policy, taking into account the aforementioned economic and price developments. The Bank recognizes that the critical challenge for Japan’s economy is to overcome deflation and return to a sustainable growth path with price stability.