and improved labor market conditions, and thereby generate a virtuous cycle in which wages and prices see sustained increases. this is what makes it necessary for households in japan to become more tolerant of price increases and for economic entities to come to terms with the view that prices are bound to rise to some extent. in other words, it is important to bring about a society in which the whole country can feel and enjoy the positive merits and benefits of economic growth that exceeds the rise in prices. japanese firms that are expanding, diversifying, and upgrading their overseas activities, such as industrial production, sales, investment, and fund management, are experiencing firsthand the growth of emerging economies in asia and elsewhere. i think this holds true for firms in kyoto as well. there is no time to waste in moving forward with reforming the industrial structure, social system, and economic structure so that japanese firms will realize growth amid mounting competition and japan's economy as a whole will also achieve growth through digitalization and the realization of a carbon - neutral society. i believe it is imperative that the bank, guided by its mandate of achieving price stability and ensuring the stability of the financial system, play its role to ascertain the extent to which monetary policy can be effective, and continue to provide appropriate support for japan's sustainable growth. thank you. economic activity, prices, and monetary policy in japan speech at a meeting with local leaders in kyoto ( via webcast ) march 3, 2022 nakagawa junko member of the policy board bank of japan i. economic developments ii. price developments iii. the bank's monetary policy chart 1 i. economic developments overseas economies ( 1 ) confirmed new cases of covid - 19 ( 2 ) global pmi ten thous. persons united states europe india s. a., di latin america other emerging economies feb. 1 / 20 manufacturing services aug. 1 feb. 1 / 21 aug. 1 cy 07 feb. 1 / 22 note : figures for manufacturing are the j. p. morgan global manufacturing pmi. those for services are the j. p. morgan global services business activity index. source : ihs markit ( © and database right ihs markit ltd 2022. all rights reserved. ). note : the latest figures are for february 25, 2022. figures for the united states, taiwan, and hong kong are from the centers for disease control and prevention ( cdc ), the taiwan ministry of health and welfare, and the hong kong

1. 2 [ + 1. 1 ] + 2. 7 to + 3. 0 [ + 2. 9 ] + 0. 8 to + 1. 0 [ + 0. 9 ] + 1. 0 to + 1. 4 [ + 1. 1 ] + 1. 0 to + 1. 3 [ + 1. 1 ] + 1. 2 to + 1. 4 [ + 1. 3 ] + 0. 9 to + 1. 2 [ + 1. 0 ] forecasts made in oct. 2021 fy2022 forecasts made in oct. 2021 fy2023 ( all items less fresh food ) forecasts made in oct. 2021 note : figures in brackets indicate the medians of the policy board members'forecasts ( point estimates ). source : bank of japan. chart 8 ii. price developments cpi ( 1 ) less fresh food 2. 5 ( 2 ) excluding temporary factors y / y % chg. 1. 5 y / y % chg. goods general services ( less house rent ) house rent ( private and imputed rent ) administered prices cpi ( less fresh food and energy ) 2. 0 1. 5 1. 0 1. 0 0. 5 0. 0 0. 5 - 0. 5 mobile phone charges - 1. 0 effects of the " go to travel " campaign effects of the consumption tax hike and free education policies energy - 1. 5 - 2. 0 - 2. 5 excluding the above factors - 3. 0 - 3. 5 cy 16 0. 0 cpi ( less fresh food ) notes : 1. figures for " energy " consist of those for petroleum products, electricity, as well as manufactured and piped gas charges. 2. figures for the " effects of the consumption tax hike and free education policies " from april 2020 onward are bank staff estimates and include the effects of measures such as free higher education introduced in april 2020. source : ministry of internal affairs and communications. - 0. 5 cy 16 notes : 1. " administered prices " excludes energy prices and consists of public services fees and water charges. 2. the cpi figures are bank staff estimates and exclude the effects of the consumption tax hike, free education policies, the " go to travel " campaign, and mobile phone charges. source : ministry of internal affairs and communications. iii. the bank's monetary policy chart 9 the bank's measures in response to covid - 19 ( from march 2020 ) supporting corporate financing special program purchases