##ifies. furthermore, on a different note, if interest rates rise and function effectively as a hurdle rate, firms, to survive, will be pressured to concentrate their business resources in areas that earn enough profits to cover the interest cost - - in other words, businesses with high added value. 1 consequently, this is expected to stimulate business metabolism and raise productivity. chart 15 : firms'financial condition savings - investment balance 80 tril. yen number of firms 6 mil. firms excess savings excess borrowings de facto debt - free debt - free number of firms - 20 - 40 - 60 - 80 fy 90 firms households government cy 90 notes : 1. in the left panel, figures are based on the flow of funds accounts. 2. in the right panel, figures show the number of privately owned establishments from the economic census for business frame and the economic census for business activity ( establishment and enterprise census up to 2006, interpolated for years with no data ), decomposed using the shares of each group based on data from teikoku databank. figures cover privately owned establishments ( single - unit establishments and head offices ). sources : ministry of internal affairs and communications ; small and medium enterprise agency ; teikoku databank ; bank of japan. regarding the hurdle rate function of interest rates, see tamura, n., " economic activity, prices, and monetary policy in japan, " speech at a meeting with local leaders in aomori, march 27, 2024, https : / / www. boj. or. jp / en / about / press / koen _ 2024 / ko240403a. htm. interest rate hikes will also have an impact on the government. speaking in general terms, it is important to steadily ensure the market credibility of fiscal management. the bank will continue to attentively assess the impact of changes in the policy interest rate, including the effects described earlier, and conduct monetary policy as appropriate, in response to developments in economic activity and prices as well as financial conditions. thank you.

( cpi ) for all items excluding fresh food has been lower than before, in the range of 2. 53. 0 percent recently ; that for all items excluding fresh food and energy, for which prices fluctuate significantly, has been at around 2 percent ( chart 5 ). the contribution of goods chart 5 : consumer prices 5 y / y % chg. energy food goods ( less food ) services cpi ( less fresh food ) cpi ( less fresh food and energy ) - 1 - 2 cy19 source : ministry of internal affairs and communications. prices to the rate of increase in the cpi has been declining due to the waning effects of a passthrough to consumer prices of cost increases led by the past rise in import prices. on the other hand, the cpi has been pushed up by increases in services prices resulting from the passthrough of higher personnel expenses to consumer prices. in terms of the median of the policy board members'forecasts, the cpi ( all items less fresh food ) is projected to continue to see a year - on - year rate of increase of around 2 percent - specifically, 2. 5 percent for fiscal 2024, 2. 1 percent for fiscal 2025, and 1. 9 percent for fiscal 2026 ( chart 6 ). although there could be an upward or downward deviation in cpi figures, price developments have been on track to achieve the price stability target. the bank therefore assesses that the likelihood of realizing this target has continued to rise. chart 6 : the bank's forecasts for the cpi notes : 1. figures are the cpi for all items less fresh food, excluding the effects of the consumption tax hikes. 2. the locations of, [UNK], and [UNK] in the chart indicate figures for each policy board member's forecasts. the risk balance assessed by each policy board member is shown by the following shapes : indicates that a member assesses " upside and downside risks as being generally balanced, " [UNK] indicates that a member assesses " risks are skewed to the upside, " and [UNK] indicates that a member assesses " risks are skewed to the downside. " the dotted lines show the medians of the policy board members'forecasts presented in the july 2024 outlook report. sources : ministry of internal affairs and communications ; bank of japan. regarding the outlook for prices, i am concerned that risks are possibly becoming more skewed to the upside. the first risk concerns the impact of