due to the following reasons : the rate increase - - from 8 percent to 10 percent - is smaller than that of the previous hike ; a reduced tax rate will be applied to some items ; permanent measures such as those concerning the provision of free education will be implemented ; and a variety of measures are to be taken so as to smooth out the effects of the front - loaded increase in demand and its fallback. however, the effects of the previous tax hike, which many economists had expected to be limited, have proved significant and lasting. there is a possibility that a decline in demand, such as the one seen after the previous hike, naturally would contain inflation. the third hurdle is price declines associated with the scheduled consumption tax hike. measures concerning the provision of free education will be implemented alongside the hike. the bank estimates that the price rises brought about by the hike and the effect of prices being pushed down due to the provision of free education will together push up the year - on - year rate of change in the cpi for all items less fresh food for fiscal 2019 and 2020, by 0. 2 and 0. 1 percentage point, respectively. in addition, i would like to mention another factor that is not directly related to the consumption tax hike. it is the planned reduction in charges for mobile phone services recently announced by some of the major mobile network operators in japan. although many of the details are uncertain and it depends on the prerequisites for such details, many analyses seem to suggest that it would push down the year - on - year rate of change in the cpi for all items less fresh food by 0. 1 to 0. 3 percentage point. 20 assuming that these estimations are correct, achievement of the 2 percent price stability target inevitably would be delayed, in accordance with the degree of reduction. regardless of these setbacks, i am not too pessimistic. the provision of free education and a reduction in mobile phone - related prices are no different from tax cuts, and people's real income increases by an amount equivalent to the degree of price declines. although it likely will take time for an increase in real income to induce an increase in actual demand, this will not hamper the achievement of the 2 percent price stability target itself. this also could be said about other price declines, including those in crude oil prices. nevertheless, there is a risk that the current sluggishness in observed prices will spill over to inflation expectations, further delaying inflation. to prepare for uncertain

on the contrary, they express considerable criticism and dissatisfaction. this is because deposits are growing faster than loans, which makes it difficult for some banks to invest these funds. of course, deposits will rise as lending increases as a result of the money multiplier mechanism, but this mechanism see naoya kato and takuji kawamoto, " corporate profits and business fixed investment : why are firms so cautious about investment? " bank of japan review, no. 16 - e - 2, april 2016, https : / / www. boj. or. jp / en / research / wps _ rev / rev _ 2016 / data / rev16e02. pdf. ; and aoki daiju and shikano tatsushi, " shotoku ga nobitemo shishutsu ga nobinai no wa naze ka, " chap. 4 in abenomikusu no shinka, ed. harada yutaka and masujima minoru ( tokyo : chuokeizai - sha, 2018 ). 14 see, for example, " mienu'deguchi,'fukusayo zodai : ginkokai ni takamaru fuman - - mainasu kinri 3 nen, " jiji press, february 15, 2019, https : / / www. jiji. com / jc / article? k = 2019021500887 & g = eco. 15 bank of japan, financial institutions accounts. alone does not lead to an increase in deposits twice as large as the increase in loans. in my opinion, if banks are struggling to invest funds, it might be better if they tried not to accumulate deposits. in this context, news reports suggest that regional financial institutions are struggling to attract personnel and that staff members are retiring early. 16 while this is reported as though it is troublesome, it consequently could lead to a reduction in the number of personnel assigned to collecting more deposits than needed and in that of branches. i think that this would increase the productivity of the banking sector, and thus of japan's economy as a whole. i am aware, of course, of the criticism that the decline in the number of bank branches would reduce convenience for users, and thus banks should not close branches. 17 however, banks would decide to close such branches because they only have few customers in the first place. i agree with the argument that having a deposit account should be regarded as a basic human