And on the assumption that international commodity prices will be on a moderate uptrend in tandem with the growth of the global economy, import prices are likely to continue rising. Of the three, the important key to achieving the price stability target under the current policy is the second route, namely, to raise the medium- to long-term expected rate of inflation.
Let me explain the reason by using the so-called Phillips curve, which shows the relationship between aggregate supply and demand balance and the inflation rate. As mentioned, when growth beyond the potential growth rate is achieved, the positive output gap widens. As the gap widens, the inflation rate will rise along the positive slope of the Phillips curve.