bankers'speeches excluding the effects of temporary factors ) has been on a decelerating trend on the whole. specifically, with respect to general services prices, firms'moves to pass on personnel expenses have been widely observed ; in contrast, particularly for goods prices, the pressure on firms to pass on raw material cost increases has waned. if we focus on factors affecting future price developments, possible upswings in the cpi, led by higher import prices, require attention ( chart 10 ). the rise in import prices to date could affect the cpi with a time lag, although commodity prices have declined and the excessive depreciation of the yen has subsided. as upward pressure on wages due to tight labor market conditions remains in overseas economies, inflation abroad could persist, exerting upward pressure on import prices. there are also uncertainties stemming from geopolitical risks. on this basis, as i will mention later, it is necessary to closely monitor how developments in financial and capital markets at home and abroad affect prices. ii. outlook for and risks to economic activity and prices a. outlook i would like to turn to the outlook for japan's economic activity and prices ( chart 11 ). as presented in the outlook for economic activity and prices ( outlook report ) decided by the bank at the july 2024 monetary policy meeting ( mpm ), the real gdp growth rate is projected to be 0. 6 percent for fiscal 2024, and 1. 0 percent for both fiscal 2025 and fiscal 2026, in terms of the median of the policy board members'forecasts. japan's economy is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions. in the corporate sector, exports and production are likely to return to an uptrend, as overseas economies continue to grow moderately. in the household sector, employment is likely to continue rising during the course of economic recovery. however, as i mentioned earlier, since it becomes more difficult for labor supply to increase and labor market conditions tighten, wage growth will increase as a trend, which also reflects price rises. in this situation, for the time being, although private consumption is expected to be affected by the price rises, it is projected to increase moderately on the back of higher wage increases. private consumption is also projected to be underpinned,

, and the risk that wages and prices will rise beyond the price stability target warrants attention. the second is downside risks to overseas economies. inflation rates in the united states and europe, which were at high levels, have been steadily declining recently. however, there are uncertainties as to how the past policy interest rate hikes by overseas central banks will affect the real economy and financial activity over time. moreover, at the beginning of august 2024, data suggesting a possible slowdown in the u. s. economy triggered market developments over concerns of a sharp economic downturn, or a hard landing. attention is warranted over the risk of continued excessive movements and adjustments in financial markets - - stemming from these concerns over a slowdown in overseas economies - - exerting further downward pressure on overseas economies and eventually spreading to japan's economy. the third risk is that delayed improvement in consumer sentiment will disrupt the virtuous cycle from income to spending. households have so far been defensive about spending, mainly because the rate of increase in the price of everyday goods such as food and daily necessities has been relatively high and growth in real income has been negative. it is true that private consumption has shown resilience thanks to improvement in the income situation, with the year - on - year rate of change in real wages turning positive recently, together with firms'initiatives and the effects of various government measures. however, i believe it is still necessary to monitor this situation carefully, as the previous prolonged negative growth in real income may hamper future improvement in consumer sentiment. iii. the bank's conduct of monetary policy 5 / 7 bis - central bankers'speeches next, i would like to talk about the bank's decisions made at the july 2024 mpm and share my views in this regard. the first point concerns the change in the bank's guideline for money market operations ( chart 12 ). specifically, the bank decided to raise the target for its policy interest rate, the uncollateralized overnight call rate, from the previous level of " around 0 to 0. 1 percent " to " around 0. 25 percent. " at the july mpm, the bank assessed that, while japan's economic activity and prices had been developing generally in line with its outlook presented in the outlook report, upside risks to prices required attention given that, for example, the year - on - year rate of change in import prices had recently turned positive again. in view of