Thereafter, in fiscal 2012, Japan’s economy is expected to continue growing at a pace above that in fiscal 2011, as the transmission mechanism by which the strength in exports and production feeds through to income and spending, will likely operate more effectively due to a continued relatively high growth in overseas economies, especially emerging and commodity-exporting economies.
Showing that in term of the midpoints of Policy Board members’ projection, Japan’s economy is projected to grow annually at 2.1 percent in fiscal 2010, 1.8 percent in fiscal 2011, and 2.1 percent in fiscal 2012. The key to the outlook for prices is not only the outlook for economic activity but also developments in people’s inflation expectations in the medium to long term.