In fiscal 2013, the economy is expected to grow faster than its potential, as overseas economies gradually pick up and private domestic demand increases robustly, coupled with rising corporate profits and labor income. However, support from reconstruction-related public demand may diminish slowly.
And growth forecasts for 2020 also point towards increasing divergence within the euro area. The recent European initiatives, such as the Next Generation EU package, should help ensure a more broad-based economic recovery across various jurisdictions and avoid the kind of economic and financial fragmentation that we observed during the euro area sovereign debt crisis.