##ity to consume than other generations and to firms ’ efforts to capture new demand. meanwhile, business fixed investment is projected to increase moderately, mainly due to the resumption of postponed investment for the maintenance and replacement of items such as machinery and to investment related to disaster prevention and energy. upward pressure on the economy from the public demand side is expected to gather full momentum as seen in the fact that the value of public works contracted, a leading indicator of public investment, has already increased significantly. the key to ensuring that this trend toward economic recovery continues and to achieving the price stability target of 2 percent in terms of the year - on - year rate of change in the consumer price index ( cpi ) is that improvements in business performance lead to increases in employee income. looking at the recent employment and income situation, supply and demand conditions in the labor market have improved, as evident in the unemployment rate and the active job openings - to - applicants ratio, and the year - on - year rate of change in the number of employees has been positive. in this situation, despite the downward pressure resulting from the uptrend in the ratio of part - time employees, the year - on - year rate of change in nominal wages per employee has turned slightly positive, with special cash bis central bankers ’ speeches earnings for june – which include summer bonus payments – showing an increase for the first time in three years. while uncertainty regarding the outlook remains, the bank would like to confirm whether these developments also lead to a rise in scheduled cash earnings. keeping these points in mind, i would like to summarize the outlook for japan ’ s economy for the next three fiscal years. while the economy will be affected by the front - loaded increase and subsequent decline in demand prior to and after the two scheduled consumption tax hikes, it is likely to continue growing at a pace above its potential, as a trend, as a virtuous cycle among production, income, and spending is maintained. in the bank ’ s interim assessment in july of the april 2013 outlook for economic activity and prices ( hereafter the outlook report ), the median of the policy board members ’ forecasts for the economic growth rate is a somewhat high 2. 8 percent for fiscal 2013 due to the effects of various economic measures and the front - loaded increase in demand, 1. 3 percent for fiscal 2014 partly due to the subsequent decline in demand, and 1. 5 percent for fiscal 2015. 2. prices next, i will talk about price

economy from the fiscal side. moreover, exports are bottoming out, particularly in germany. it is likely that the european economy will start picking up gradually as these developments continue. however, i must say that a fundamental resolution of the european debt problem has only reached the halfway point. the current stability in european financial markets seems to have been brought about because the ecb has been buying time through its large - scale monetary easing. in the meantime, it is necessary to steadily take steps through various structural reforms and toward forming banking, fiscal, economic, and political unions as presented in a roadmap for unification of europe. the time the ecb can buy is limited and might be gradually becoming costly. the chinese economy continues to grow steadily, although the pace of growth has become somewhat lower than that in the past. from the time of inauguration, the new government clearly showed its stance of pursuing structural reforms, by announcing frugality laws and measures to contain real estate prices. against such a backdrop, there has been concern since around the turn of the year that the economy might slow down. however, the government in july showed its stance of focusing on achieving this year ’ s target of economic growth of around 7. 5 percent and it decided various measures that paid due consideration to economic growth ; thus, looking to the future, it is expected that stable growth at around the current pace will continue, supported by resilient domestic demand. in terms of further policy responses, the fiscal situation in china remains relatively sound and there is additional room for fiscal stimulus. owing to these developments, the chance of the chinese economy decelerating significantly, at least in the short run, is viewed as not great. in the meantime, what is somewhat worrisome are emerging economies. looking back, after escaping from acute symptoms of the lehman crisis, the global economy recovered, led by bis central bankers ’ speeches high growth in emerging economies. behind this, there were mainly two reasons. first, the trend of domestic demand in those economies was robust due to the consumption spree associated with a rise in the living standard and to the need to expand social infrastructure. second, after the financial crisis, aggressive monetary easing in advanced economies led to capital inflow to emerging economies, providing additional impetus for emerging economies to grow. however, recently, the u. s. and european economies have been improving, while growth momentum in emerging economies is somewhat weak. the first thing that comes to mind as a reason for this is that