seen in some indicators, due in part to a deterioration in consumer sentiment, reflecting volatile developments in financial markets. private consumption is likely to increase moderately as the employment and income situation continues improving. bis central bankers ’ speeches outlook for economic activity presented in the april outlook report turning to the outlook for japan ’ s economic activity based on the developments explained so far, although sluggishness is expected to remain in exports and production for the time being, domestic demand is likely to follow an uptrend, and exports are expected to increase moderately on the back of emerging economies moving out of their deceleration phase. thus, japan ’ s economy is likely to be on a moderate expanding trend. taking into account the fluctuations due to a front - loaded increase and subsequent decline in demand prior to and after the consumption tax hike planned in april 2017, the expected growth rates during the projection period are in the range of 1. 0 – 1. 5 percent for fiscal 2016, slightly positive for fiscal 2017, and about 1 percent for fiscal 2018 ( chart 4 ). comparing the current projections through fiscal 2017 with those in the january 2016 outlook report, gdp growth is somewhat lower, influenced mainly by weaker exports that reflect the slowdown in overseas economies. ii. current situation of prices and their outlook next, i will touch on price developments. the year - on - year rate of change in the consumer price index ( cpi, all items less fresh food ), which had been minus 0. 5 percent just before the introduction of qqe, increased to as high as 1. 5 percent in april 2014, excluding the effects of the consumption tax hike. however, as private consumption continued to be relatively weak after the consumption tax hike and as a result of a substantial fall in crude oil prices since summer 2014, the year - on - year rate of change has declined and currently is around 0 percent ( chart 5 ). nevertheless, excluding the effect of the decline in energy prices, the underlying trend in inflation has improved steadily. for example, the year - on - year rate of change in the cpi for all items excluding fresh food and energy has remained positive for 30 consecutive months since october 2013, and was 1. 1 percent in march 2016. this is the first time since the late 1990s, when japan ’ s economy fell into deflation, that sustained price increases have been seen. monthly data for the cpi are susceptible to various factors, such as developments in import prices that reflect changes in energy prices and fluctuations in

take time to clear. this will mean that in the two - year period 2012 – 2013 world growth will be slower than foreseen in september. we now anticipate a recession in the eurozone in 2012, based on the recent indicators of manufacturing output and expectations in the region. in the u. s., recent output indicators have been somewhat better than expected, but not so much as to modify the view that this economy will experience a long period of slow growth, but not a recession. political difficulties to agree on a gradual fiscal adjustment plan have increased the uncertainty about the performance of the u. s. economy. emerging economies will grow less than we thought in september, but still outperforming their developed counterparts. china ’ s gdp growth will slow down in 2012 – 2013, to 8. 2 % in 2012 and 8. 5 % in 2013. these figures, although high, are the lowest since 2001. all these data combined result in a forecast for world growth in 2012 and 2013, 0. 5 and 0. 4 percentage points less than assumed in september. the terms of trade will also drop from 2011. the scenario assumes a copper price averaging us $ 3. 5 / lb and us $ 3. 4 / lb in 2012 and 2013, respectively. the prices of oil and fuels will follow a downward trend ( table 1 ). the reduced external impulse assumed in the baseline scenario will translate into slower growth in chile than forecast in september. the main sources of this revision are the weak external demand affecting domestic activity, stringent international financial conditions and reduced terms of trade. in 2012, the chilean economy will grow in the 3. 75 % – 4. 75 % range, after growing 6. 2 % in 2011 ( table 2 ). in this scenario, headline inflation will drop to around bis central bankers ’ speeches 3 % in the first half of 2012, and will hover around that figure through the end of the projection horizon, this time the fourth quarter of 2013 ( figure 7 ). these projections use as a working assumption that the real exchange rate will be fairly unchanged over the next two years, based on our assessment of its current level, which is within the range that is thought to be consistent with its long - term fundamentals. the appreciation of the dollar in the global market has also affected the chilean peso. the peso / dollar parity has depreciated around 10 % between the statistical cutoff of this and the latest monetary policy report