by the economy ’ s growth potential, this could in turn impair the stability in economic activity, and hence in prices. in order to ensure both the sound development of the national economy and credibility in the conduct of monetary policy, i consider it desirable to make the time frame for achieving the price stability target flexible, thereby achieving prolonged economic recovery, albeit moderate, while at the same time providing support from the financial side for steady progress in efforts to increase the productivity growth rate and the potential growth rate. meanwhile, the growth potential of the economy will likely increase as efforts to strengthen the foundations for economic growth make progress, and so will the price level that is sustainable and consistent with the growth potential. it should be noted that, in the short term, however, prices might face downward pressure, for example, when those in certain industries decline due to deregulation, which represents one such effort. this is one of the reasons why i consider that the conduct of monetary policy with a price stability target has to be flexible. b. expansion of qqe when the bank introduced qqe in april 2013, i supported the concrete measures of qqe, judging that the scale was one in which the associated positive effects would just about outweigh the side effects when confined to a certain time period. since the time of introduction, however, i have considered that, if such large - scale monetary easing policy were to be protracted or such policy strengthened, the associated side effects would instead outweigh the positive effects, and this would heighten the risk of undermining economic and price stability in the long run. therefore, in considering the expansion of qqe, i judged that the accompanying positive effects would not be worth the costs and side effects. with regard to possible positive effects of the expansion of qqe, even if additional measures further lower interest rates, room for a further decline in real interest rates – which generates policy effects – is considered to be small, as nominal interest rates are already at historically low levels and inflation expectations are less likely to rise not only in japan but also worldwide. it also should be noted that, although qqe could probably elicit reasonable effects through people ’ s expectations at the time of introduction, additional measures are likely to only have limited effects through this channel compared with when it was introduced. bis central bankers ’ speeches on the other hand, in terms of the costs and side effects of the expansion, a possible further impairment of market functioning and

oil prices could also lead to a reduction in fixed investment in the oil - related industries and to a decline in u. s. exports because of weaker - than - expected overseas economic growth, including that of oil - producing countries. besides, it should be noted that the international monetary fund ( imf ) revised downward its latest forecast for global growth from the previous forecast. the downward revision is mainly attributable to investment weakness caused by diminished expectations about medium - term growth in many advanced and emerging economies, despite the expectation for positive effects of the decline in crude oil prices. taking these factors into account, i am personally paying closer attention to downside risks to overseas economies, developments in which are a key determinant of japan ’ s exports. c. private consumption relatively weak developments have been observed in indicators of consumer sentiment since summer 2014, although these indicators have recently shown some signs of improvement. behind this, there seems to be concern over a decline in real wages caused by the divergence between the rate of increase in prices and that in wages. in this regard, in a situation where the inflation rate has recently shown a declining trend, if increases in wages, including those in base pay, are realized this coming spring, as happened last spring, the divergence between the two rates will narrow or dissipate ; this in turn will exert positive effects on consumer sentiment, and hence on private consumption. however, even if major firms raise their base pay to a reasonable degree, the rate of increase in scheduled cash earnings within the overall economy could diverge from that in the base pay of these firms. here are some of the reasons. first, developments in wage increases by small firms also bis central bankers ’ speeches determine the course of wages in japan. second, many non - regular employees are not eligible for base pay increases. and third, the uptrend in the proportion of non - regular employees, for whom wage levels are relatively low, has in part exerted downward pressure on the average wage level. on this basis, despite a continuing trend of improvement in labor market conditions, the pace of improvement in real income will likely remain moderate and private consumption will probably continue to increase at a moderate pace that is consistent with the pace of increase in real income. d. outlook for prices regarding the outlook for prices, in the october 2014 outlook report, i formulated a proposal to change the expression that the year - on - year rate of increase in the cpi is likely to reach around