4  BIS central bankers’ speeches  III. Medium- to long-term challenges for Japan’s economy  A. Background to the protracted decline in prices  Let me talk about the background to the current deflationary situation in Japan.
Japan’s economic growth rate has been on a long-term downward trend: the average annual rate declined from 4.4 percent in the 1980s to 1.5 percent in the 1990s, and then to 0.6 percent in the 2000s reflecting in part the impact of the Lehman shock. In this situation, consumer prices also continued to decline.