However, the pace of recovery in household income will be modest for the time being, since firms’ perceptions of excess employment still persist, and thus significant changes have not been observed in their efforts to reduce personnel expenses. Overall, the economy is likely to recover gradually, led mainly by business fixed investment, unless there are major adverse external shocks.
In addition, the favorable financial environment created partly by the Bank’s sustaining easy monetary stance is expected to continue underpinning the economy. With regard to prices, import prices are rising, reflecting an increase in international commodity prices such as crude oil prices since April.