factors are expected to offset each other ; while a decline in the forecast for global economic growth, mainly for emerging economies, as shown in the imf ’ s world economic outlook released in october 2013, will exert negative effects on japan ’ s external demand, the government ’ s economic package will produce positive effects on the economy. another consumption tax hike is expected in october 2015, but the background to the economic outlook for fiscal 2015 remains basically the same as that for fiscal 2014, and the median of the policy board members ’ forecasts for fiscal 2015 is unchanged from that in the july 2013 interim assessment. it should be noted, however, that this economic outlook is based on the assumption that global financial markets will remain stable on the whole. specifically, ( 1 ) the reduction in the pace of asset purchases by the federal reserve, which was postponed once, will be smoothly executed and will not cause turmoil in global financial markets ; ( 2 ) international commodity markets will remain stable despite retained geopolitical risks in the middle east ; ( 3 ) the european sovereign debt problem will not cause turbulence in the financial markets ; and ( 4 ) the u. s. economy will not experience turmoil stemming, for example, from a longterm government shutdown or default on government debt. if any of these assumptions collapses, this would affect japan ’ s economy to a considerable degree through turmoil in global financial markets. in addition, i personally would like to keep paying close attention to the possibility of declining potential growth rates in major economies, including the u. s. economy, and the associated disinflationary trends in the u. s. and european economies. c. outlook for prices in japan as revealed in the minutes of the monetary policy meeting held on october 31, 2013, i cast a dissenting vote regarding the descriptions of the outlook for prices in the outlook report, so i may not be in the right position to explain the baseline scenario of the outlook for prices in japan. thus, in the following section, i would like to express my views on prices by pointing out the main differences between my views and the baseline scenario. looking back at price developments up to the present, the year - on - year rate of change in the consumer price index ( all items less fresh food ; hereafter prices ) has been moving in line with the baseline scenario against the backdrop of the depreciation of the yen, the hike in energy prices, and bottoming out in prices of digital appliances. prices

november 8, 2017 bank of japan economic activity, prices, and monetary policy in japan speech at a meeting with business leaders in miyazaki yukitoshi funo member of the policy board ( english translation based on the japanese original ) i. recent economic and price developments a. overseas developments i would like to begin my speech by talking about overseas economies. business sentiment of manufacturing firms has been on an improving trend on a global basis, and the world trade volume has been recovering. in this situation, overseas economies have continued to grow at a moderate pace on the whole. in terms of the outlook, overseas economies are expected to continue growing at a moderate pace. according to the world economic outlook, released in october 2017 by the international monetary fund, the global growth rate is projected to be 3. 6 percent in 2017 and 3. 7 percent in 2018. looking at developments by major region, the u. s. economy has continued to recover firmly, mainly in household spending, owing to a steady improvement in the employment and income situation. as for the outlook, the economy is expected to continue to see firm growth driven by domestic private demand. the european economy also has continued to recover steadily. as for the outlook, the economy will likely follow a moderate recovery trend, while uncertainty - - associated, for example, with political issues such as those regarding negotiations on the united kingdom's exit from the european union ( eu ) - - is expected to be a burden. the chinese economy has continued to see stable growth on the whole, partly due to the effects of authorities'measures to support economic activity. as for the outlook, the economy is likely to broadly follow a stable growth path as authorities conduct fiscal and monetary policy in a timely manner. emerging economies other than china and commodity - exporting economies have picked up on the whole. as for the outlook, their growth rates are likely to increase gradually, due mainly to the spread of the effects of steady growth in advanced economies and the effects of the economic stimulus measures. risk factors to the overseas economic outlook are wide ranging, as exemplified by ( 1 ) the u. s. economic policies and their impact on global financial markets, ( 2 ) developments in emerging and commodity - exporting economies, ( 3 ) negotiations on the united kingdom's exit from the eu and their effects, ( 4 ) prospects regarding the european debt problem, and ( 5 ) geopolitical risks. i hold the view that it is important to stay vigilant regarding these