The rate of economic growth is expected to temporarily turn negative in April–June 2014 owing to the adverse impact of the consumption tax hike. But subsequently, the growth rate will likely rise at a very moderate pace, and will likely remain above its potential growth rate throughout the projection period.
The upside and downside risks to the Bank’s baseline scenario regarding the economy mentioned in the Outlook Report include the following: (1) developments in exports; (2) the effects of the consumption tax hikes; (3) firms’ and households’ medium- to long-term growth expectations; and (4) fiscal sustainability in the medium to long term. The Bank assesses that these risks are balanced as a whole.