To lead Japan’s economy into a steady recovery, it is important to prepare an environment where firms and households can regain confidence in Japan’s economic future by, for instance, promptly restoring the stability of the financial system. With regard to prices, reflecting the large output gap, domestic wholesale prices are on a downtrend, and corporate service prices are weakening.
Consumer prices have increased above the previous year’s level due to the rise in prices of perishables. Excluding this effect, however, consumer prices basically continue to be weak. As for the outlook, the economic deterioration is likely to continue easing mainly due to the increase in public investment.