taken from the report regarding japan's energy issues released by the agency for natural resources and energy of ministry of economy, trade and industry on its website in august 2022 ( available only in japanese ). environment caused by the pandemic, compared with the united states and europe. i consider this to be one of the reasons for the delayed recovery in japan's economy. the output gap, which captures the utilization of labor and capital, has also been consistently negative since the april - june quarter of 2020 ( chart 6 ). tightening monetary policy when demand remains insufficient compared with supply capacity would put significant downward pressure on the economic activity of firms and households, and could draw japan's economy back into deflation. the second reason i believe the bank should continue with monetary easing is that the current price rises have not been accompanied by wage growth. let us compare price developments in japan with those in the united states and europe. services prices have been increasing while the hourly wage growth rate is in the range of 4. 0 - 6. 0 percent in the united states and 3. 0 - 4. 0 percent in the euro area. the inflation rate excluding energy and food remains at a high level - - 6. 3 percent for october 2022 in the united states and 5. 0 percent for november in the euro area. this has prompted central banks to continue to make rapid policy rate hikes in an effort to prevent a wage - price spiral. in japan, the inflation rate excluding fresh food and energy has indeed risen, to 2. 5 percent for october. the breakdown shows that the inflation rate for services - - which account for more than half of the total price increase, and in which wages make up a large proportion of costs - - has increased but is still below 1 percent. in my view, concern about a wage - price spiral in japan is far from warranted. i consider continued accommodative monetary policy to be essential to support firms'initiatives as japan's economy recovers from the pandemic and to develop an environment conducive to wage rises necessary for the sound development of the national economy. iii. japan's economic growth to achieve the 2 percent price stability target in a sustainable and stable manner and realize sustainable economic growth, it is essential that wages rise in tandem with economic growth. however, this expected situation has not yet been realized as japan's economy has long been mired in a state of low growth, low inflation, and

. 8 national institute of population and social security research, " the financial statistics of social security in japan ( fiscal 2020 ), " august 2022 ( currently available only in japanese ). individual savings account ( nisa ) and ideco pension plans, the government's doubling asset - based incomes plan will promote lifelong household asset formation over the course of 30 to 50 years, focusing on the long term, on risk diversification, and on regular contributions. i expect that this would generate stable income and stimulate private consumption, thereby forming a virtuous cycle from income to spending. thank you. economic activity, prices, and monetary policy in japan speech at a meeting with local leaders in nagano december 7, 2022 nakamura toyoaki member of the policy board bank of japan chart 1 imf projections in the world economic outlook ( october 2022 ) y / y % chg. imf projections - 2 - 4 japan united states - 6 china world output euro area - 8 cy 80 source : imf. chart 2 consumer prices japan - 1 - 2 united states y / y % chg. cpi ( less fresh food ) < 100 % > cy 18 temporary factors energy < 7 % > housing rent < 19 % > services ( less housing rent ) < 31 % > goods < 40 % > cy 18 y / y % chg. - 1 - 2 - 1 - 2 energy < 7 % > housing rent < 32 % > services ( less housing rent ) < 31 % > goods < 30 % > cpi < 100 % > euro area y / y % chg. cy 18 energy < 11 % > housing rent < 7 % > services ( less housing rent ) < 35 % > goods < 47 % > hicp < 100 % > notes : 1. figures for temporary factors for japan are bank staff estimates and consist of the effects of the reduction in mobile phone charges, the consumption tax hike, free education policies, and travel subsidy programs. 2. figures in angular brackets show the share of each component. figures for 2022 / q4 are those for october. sources : haver ; ministry of internal affairs and communications. chart 3 forecasts of the majority of the policy board members y / y % chg. ( reference ) cpi ( all items less fresh food and energy ) real gdp cpi ( all items less fresh food ) fiscal 2022 [UNK]. 8 to [UNK]. 1 [ [UNK]. 0 ] [UNK]. 8 to [UNK]. 9 [ [UNK]. 9