As domestic demand is likely to be firm and exports are expected to increase moderately, a virtuous cycle from income to spending is likely to be maintained in the household and corporate sectors. Firms’ and households’ growth expectations are also likely to rise moderately in line with continued accommodative financial conditions.
At the same time, the likelihood of overshooting the inflation target was judged to have declined. Hence, we viewed a small further easing of policy as a prudent measure. The good economic outcomes over the past year will, I suspect, be a recurring feature of our discussion today.