of emerging economies other than china and commodity - exporting economies are likely to increase gradually, due mainly to the effects of the economic stimulus measures and the spread of the effects of steady growth in advanced economies. risk factors to the overseas economic outlook are wide ranging, as exemplified by developments in the u. s. economy and the impact of its monetary policy on global financial markets, ( 2 ) developments in emerging and commodity - exporting economies, particularly china, ( 3 ) the consequences stemming from the united kingdom's vote to leave the european union ( eu ) and their effects, ( 4 ) prospects regarding the european debt problem, including the financial sector, and ( 5 ) geopolitical risks. therefore, i consider it necessary to closely monitor various risk factors from a broad perspective in making projections regarding overseas developments. b. japan's economy and prices 1. economic activity i will now discuss the economic situation in japan given the overseas developments i have just outlined. japan's economy has continued its moderate recovery trend. on an annualized quarter - on - quarter basis, the real gdp growth rate for the october - december quarter of 2016 registered 1. 2 percent, representing an increase for four consecutive quarters. the rate continued to rise, due mainly to an increase in external demand, although domestic demand was somewhat sluggish. with regard to the outlook, japan's economy is likely to turn to a moderate expansion. domestic demand is likely to follow an uptrend, with a virtuous cycle from income to spending being maintained in both the corporate and household sectors, on the back of highly accommodative financial conditions and fiscal spending through the government's large - scale stimulus measures. meanwhile, exports are expected to follow a moderate increasing trend as the growth rates of overseas economies increase moderately. according to the bank's january 2017 outlook for economic activity and prices ( hereafter the outlook report ), the medians of the policy board members'forecasts for the economic growth rate are 1. 4 percent for fiscal 2016, 1. 5 percent for fiscal 2017, and 1. 1 percent for fiscal 2018, and the economy is expected to continue growing at a pace above its potential through the projection period of fiscal 2016 - 2018. 1 2. prices next, i will talk about price developments. the year - on - year rate of change in the consumer price index ( cpi ) for all items less fresh food has increased, reflecting a rise in energy prices, and has

bank of japan ’ s january report of recent economic and financial developments 1 bank of japan, 20 january 2006. * * * the bank ’ s view 2 japan's economy continues to recover steadily. exports have continued to increase, and the uptrend in industrial production has become evident. business fixed investment has continued to increase against the background of high corporate profits. household income has also continued rising moderately, reflecting the improvement in employment and wages. in this situation, private consumption has been steady. housing investment has continued to show some strength. meanwhile, public investment has basically been on a downtrend. japan's economy is expected to continue to recover steadily. exports are expected to continue rising against the background of the expansion of overseas economies. domestic private demand is likely to continue increasing against the background of high corporate profits and the moderate rise in household income, while structural adjustment pressure, such as the excess debt of firms, has almost dissipated. in light of these increases in demand both at home and abroad, production is also expected to follow an increasing trend. public investment, meanwhile, is projected to remain on a downtrend. on the price front, domestic corporate goods prices have continued to increase, mainly reflecting the rise in international commodity prices and the depreciation of the yen in the second half of last year. the year - on - year rate of change in consumer prices ( excluding fresh food ) has turned slightly positive. domestic corporate goods prices are expected to continue increasing for the time being, mainly due to the effects of the rise in international commodity prices. as for the year - on - year rate of change in consumer prices, a positive trend is projected to be established, as supply - demand conditions continue improving gradually and the effects from the reduction in telephone charges dissipate. as for the financial environment, the environment for corporate finance is becoming more accommodative on the whole. the issuing environment for cp and corporate bonds is favorable. also, the lending attitude of private banks is becoming more accommodative. the lending attitude of financial institutions as perceived by firms has been improving. the pace of decline in credit demand in the private sector is very moderate. under these circumstances, the rate of increase in the amount outstanding of lending by private banks is accelerating, and the amount outstanding of cp and corporate bonds issued has been above the previous year's level. the year - on - year growth rate of the monetary base is 1. 0 percent, and that of