The Bank has not yet detected any clear signs of such downward pressures, and intends to continue examining the possible effects of fiscal tightening. There appear to be, however, several good reasons not to be too pessimistic.
Regarding fiscal tightening, public works are not to be cut drastically in the new fiscal year, but rather, have already been reduced gradually from the latter half of 1996. Despite the decline in public works, domestic private demand has continued to expand, supported in part by the improvement in external demand.