A matter of concern is whether the deceleration in the rate of increase in the CPI or the decline in the CPI on a year-on-year basis, which have been observed recently, will not affect people’s medium- to long-term inflation expectations in a backward-looking manner.
In this regard, judging from firms’ price-setting behavior, consumers’ spending activity, and the recent developments in wage negotiations, people’s perception of inflation has been changing steadily despite the decline in energy prices.