deflation, taking a step ahead of others may have seemed risky and the best option may have been to wait patiently, but this situation has already changed. there are some firms that have shaken off the deflationary mindset and have proactively embarked on new initiatives. when more firms follow suit, this will give rise to a virtuous cycle in the economy as a whole, with prices rising moderately as wages and productivity increase, leading to sustainable economic growth. i sincerely hope that the year 2018 will be a wonderful one for all of you, and that you will overcome the challenges posed by labor shortages, helping japan's economy to enter a new phase. the bank will continue to provide you with the maximum support in our role as the central bank. thank you for your attention. overcoming labor shortages : prospects for sustainable economic growth speech at the meeting of councillors of nippon keidanren ( japan business federation ) in tokyo december 26, 2017 haruhiko kuroda governor of the bank of japan chart 1 global economy world trade volume and real gdp of the global economy projections for global real gdp growth y / y % chg. y / y % chg. imf projection - 5 - 10 - 15 trade volume real gdp - 1 world output - 2 advanced economies - 3 - 4 - 20 cy 05 06 07 08 09 10 11 12 13 14 15 16 17 emerging market and developing economies - 5 cy 05 06 07 08 09 10 11 12 13 14 15 16 17 18 notes : 1. figures for the trade volume are those for real imports. the figure for 2017 / q4 is that for october. 2. real gdp of the world economy in the left chart is based on boj staff calculations using ppp - adjusted gdp shares of world total gdp from the imf as weights. sources : cpb netherlands bureau for economic policy analysis ; imf, etc. chart 2 business conditions di ( tankan ) by firm size by region di ( " favorable " - " unfavorable " ), % points di ( " favorable " - " unfavorable " ), % points " favorable " " favorable " " unfavorable " - 10 - 10 - 20 - 20 - 30 large enterprises - 40 medium - sized enterprises - 50 " unfavorable " - 30 range of responses by region - 40 japan ( all industries and enterprises ) - 50 small enterprises - 60 cy 05 06 07 08 09 10 11 12 13 14 15 16 17 -

mr lopes ’ speech before the economic affairs commission of the federal senate summary of a speech by the new president of the central bank of brazil, mr francisco lopes, before the economic affairs commission of the federal senate in brasilia on 26 / 1 / 99. translated from jornal do brasil of 27 / 1 / 99. inflation i am sure inflation will not come back. of course, there will be some adjustment in relative prices but there is no possibility of resuming the old inflationary process. we will have to put in place tight monetary policy and prevent any forms of indexation, opportunism or speculation. as the brazilian economy is relatively closed - imports correspond to 8 % of gdp - a devaluation of 50 %, ( i. e. the exchange rate stabilising at the very depreciated level of r $ 1. 80 ), would add about 4 to 5 % to the rate of inflation. overvaluation of the real the use of the exchange rate anchor made an exchange rate overvaluation inevitable. nevertheless we had imagined it would be possible to shift from the mini - band regime to the free floating regime in a rather gradual way, while the economy was still attracting foreign capital. but reality sometimes frustrates the best intentions. with the benefit of hindsight ( after the asian and russian crises ), the widening of the exchange rate band in april last year, which widened the amplitude of the exchange rate fluctuation by 1 % per year, was a rather timid movement. but it is easy to be wise after the event. wider exchange rate band the attempt to shift from the mini band to the wider band lasted for 48 hours. we knew that it had limited chances of success. within four days we had lost almost us $ 6 billion in international reserves. and the free floating exchange rate regime, supported by a solid fiscal stance, has become our new objective. the idea of widening the band under the model designed and issued as of january 13th was good, but unfortunately it came too late. centralisation of foreign exchange transactions suggestions about centralising exchange market operations shock me. because centralising exchange market transactions in the central bank amounts to having no foreign exchange regime, it leads the country to the moratorium, with the re - negotiation of debts. credit lines to brazil would be cut. it means violating the rules of the game. it would be a completely arbitrary act which would have terrible consequences. economic growth the first semester