the cpi is likely to reach close to the price stability target of 2 percent from the latter half of fiscal 2014 through fiscal 2015. while we recognize that lifting inflation expectations through monetary policy is an extremely ambitious approach in unchartered waters, we would like to meet the longstanding challenge of overcoming deflation on all counts by steadily gaining the fruits of pursuing the qqe. concluding remarks in conclusion, i will touch on the economies of shimane prefecture and the san - in region. shimane prefecture seized the historical watersheds of “ 1300 years of the kojiki – japan ’ s oldest chronicle ” in 2012 and “ izumo taisha ’ s sengu – a period of massive repair work – of the heisei period ” in 2013 as golden opportunities, and has been making efforts all over the prefecture to establish a sightseeing brand. its aggressive pr activities are also seen in the metropolitan area. together with the recent boom in visitors to spiritual places and the opening of the matsue expressway, tourism demand has been increasing to a substantial degree. according to the bank ’ s matsue branch, the economic effect of an increase in tourism demand in 2013 stemming mainly from izumo taisha ’ s sengu was estimated to be slightly less than 30 billion yen. given that shimane ’ s gross prefectural production is slightly more than two trillion yen, the increase in tourism demand will be a substantial boost for the regional economy, for which the average growth rate over the past 10 years has been about zero percent. in addition to firm tourism, business conditions in the non - manufacturing sector, including the construction industry, which has been underpinned by an increase in public and private bis central bankers ’ speeches construction, have been generally improving. business conditions have also been improving in the manufacturing sector due mainly to strong production in electronic parts for smartphones and tablet computers as well as automobile - related goods, and increased production in food & beverages and construction - related materials, reflecting an increase in domestic demand such as tourism and public investment. as a result, the economy of shimane prefecture has been moderately recovering. according to the recently released september tankan survey, business conditions in the san - in region reached the highest level since 1991, confirming that economic recovery has been spreading. the business conditions have been at almost the same level compared with those nationwide. during japan ’ s longest post - war economic recovery, between 2002 and 2007, an improvement in business conditions in

bank of japan ’ s december review of monetary and economic trends in japan bank of japan, communication, 22 / 12 / 97. japan ’ s economic growth has stalled. weak household expenditures have gradually affected production, employment and income. corporate sentiment is also deteriorating. with respect to final demand, net exports have continued to increase and business fixed investment has been rising moderately, particularly in the manufacturing sector. meanwhile, public - sector investment has been decreasing, and housing investment has also continued to be weak. personal consumption has continued to stagnate, reflecting weakening consumer confidence. industrial production has been on a slightly declining trend because inventory adjustment pressure has spread gradually reflecting weak final demand. the pace of improvement in employment and income conditions has been slowing. prices have remained stable on the whole, with the exception of wholesale prices which have declined somewhat. monetary aggregates continue to grow at around 3 per cent. personal consumption has continued to stagnate. although outlays for travel have been increasing moderately, passenger car sales have fallen significantly below the level recorded in the second half of fiscal 1996 when sales surged, and have not even recovered the levels recorded before then. the recovery in sales of household electrical appliances has paused and sales at department stores and supermarkets have remained below the previous year ’ s level. among leading indicators of business fixed investment, machinery orders continued to increase since early 1997 after having surged in the second half of 1996. recently, orders from nonmanufacturing firms have been weak, however. construction floor area has followed a moderate recovery trend, albeit with some fluctuations. according to the bank of japan ’ s tankan - - short - term economic survey of enterprises of december, investment growth in the principal nonmanufacturing firms for fiscal 1997 is projected to be lower than that in fiscal 1996, while growth in the principal manufacturing firms is planned to be higher than that in the previous fiscal year. this makes the growth of investment plans in principal firms overall the same as the previous year. meanwhile, overall investment plans by small firms in fiscal 1997 are lower than those for fiscal 1996. this is because investment plans of nonmanufacturing firms fell significantly below the previous year, although plans of manufacturing firms at this time of the fiscal year grew at a somewhat higher pace compared to fiscal 1996. with respect to housing investment, housing starts in terms of the seasonally - adjusted annual rate declined in july to 1. 24 million, the lowest level since september 1985, following the surge in demand in