the april 2018 outlook report, the real gdp growth rate is projected to be 1. 6 percent for fiscal 2018, and 0. 8 percent each for fiscal 2019 and 2020. let me explain the outlook in detail by major component. first, business fixed investment is likely to continue increasing. this is because, in a situation where extremely stimulative financial conditions are maintained, fixed investment will be positively affected by an improvement in corporate profits, the materialization of the effects of projects conducted under the fiscal investment and loan program as well as the effects of investment - enhancing tax incentives, and a moderate improvement in growth expectations. specifically, an increase is likely to be seen in investment such as, ( 1 ) that intended for domestic capacity expansion in line with the economic expansion ; ( 2 ) that related to the 2020 olympic games and urban redevelopment projects ; ( 3 ) that aiming at improving efficiency and saving labor in order to deal with, for example, the labor shortage ; and ( 4 ) in research and development for growth areas. private consumption is expected to follow a moderate increasing trend, due mainly to an increase in employee income as well as replacement demand for durable goods, and housing investment is expected to remain more or less flat. exports will likely continue their increasing trend for the time being, as those of capital goods and it - related goods, in which japan has a comparative advantage, are likely to be firm. thereafter, they are expected to continue their moderate increasing trend, due mainly to the improvement in overseas economies. industrial production will likely continue to increase firmly for the time being, and thereafter is projected to continue on a moderate increasing trend. the year - on - year rate of change in the cpi ( all items less fresh food ) is likely to increase toward 2 percent. this is because, although upward pressure of energy prices is likely to wane moderately, firms are likely to gradually shift their stance toward raising wages and prices with the improvement in the output gap, and inflation expectations are expected to gradually rise. looking at the medians of the policy board members'forecasts in the april 2018 outlook report, the year - on - year rate of change in the cpi ( all items less fresh food ) is projected to be 1. 3 percent for fiscal 2018 and - - on a basis excluding the effects of the scheduled consumption tax hike - - 1. 8 percent each for fiscal 2019 and 2020. developments in prices since the release of the april 2018 outlook report have been slightly weak relative to what had

the 2 percent target - - question the continuation of strong monetary easing. they claim, for example, that the level of interest rates should be adjusted by taking into consideration financial institutions'profits, among other factors. i will discuss the first opinion in detail later. let me first address the second opinion. at each mpm, the bank decides the guideline for market operations based on a comprehensive consideration of ( 1 ) the possible spillover effects on bank lending rates and issuance rates for corporate bonds, ( 2 ) the impact on economic activity, and ( 3 ) the impact on financial functioning, among other factors. as the bank stated in the comprehensive assessment : developments in economic activity and prices as well as policy effects since the introduction of qqe, released in september 2016, the impact on financial functioning should be taken into consideration when conducting monetary policy. in fact, it warrants attention that financial institutions'lending margins have been shrinking due, for example, to strong monetary easing and intensifying competition among banks. it should be noted, however, that since the 1990s, deposit and lending margins have been on a narrowing trend with low economic growth, and in that sense, this has long been a major challenge for financial institutions. in addition, it is an issue of urgent priority to take measures from a medium - to long - term perspective to respond to fintech and other technological innovations and to changes in the external environment, such as the decline in both population and the number of firms. structural problems - - which will have an impact on financial institutions'business environment - - and the effects of monetary easing should be analyzed and discussed independently of each other. at present, japan's economy has finally reached a state of being no longer in deflation, which is commonly defined as a sustained decline in prices. given this, it is necessary to ensure that the economy fully overcomes deflation. needless to say, the bank does not aim solely at price rises. it is emphasized in the joint statement by the government and the bank released in 2013 that the achievement of the price stability target of 2 percent should be accompanied by the strengthening of the growth potential of the economy. 2 in addition, in a speech delivered in may 2013, the month following the introduction of qqe, then deputy governor hiroshi nakaso said that " [ t ] he price stability target we aim at should be achieved in a virtuous cycle in which the real economy improves in a balanced manner, accompanied by