For example, there is no doubt that the decline in interest rates has been contributing significantly to the recovery in housing and business fixed investments. At the same time, fiscal expenditures have underpinned domestic aggregate demand. However, forces encouraging economic recovery are not limited to the supporting policy measures.
As the economy follows a recovery path supported by policy effects, a larger number of firms with improving profits have begun to show a more positive stance toward business fixed investment and employment. As a result, the risk of a deflationary spiral, which was an issue of concern last year, has been practically eliminated.