are calculated as the weighted averages of growth rates of advanced economies as well as emerging market and developing economies using gdp shares of world total gdp from the imf as weights. 2. in the right chart, figures are all industries including financial institutions. including software and r & d investment and excluding land purchasing expenses ( r & d investment is not included until the december 2016 survey ). there is a discontinuity in the data in december 2017 due to a change in the survey sample. sources : imf ; bank of japan. chart 7 ii. price developments consumer prices y / y % chg. - 1 cpi ( all items less fresh food ) - 2 cpi ( all items less fresh food and energy ) - 3 cy 85 note : figures are adjusted for changes in the consumption tax rate. source : ministry of internal affairs and communications. chart 8 ii. price developments firms'price - setting stance output prices di ( tankan ) 20 di ( " rise " - " fall " ), % points services producer price index ( sppi ) 1. 5 y / y % chg. large enterprises 1. 0 small enterprises 0. 5 - 10 0. 0 - 20 - 0. 5 - 30 - 1. 0 - 40 - 50 cy 85 sppi ( all items excluding international transportation ) - 1. 5 cy11 notes : 1. in the left chart, there is a discontinuity in the data in december 2003 due to a change in the survey framework. 2. in the right chart, figures are adjusted for changes in the consumption tax rate. source : bank of japan. chart 9 ii. price developments boj's forecasts of the cpi ( april 2019 outlook report ) 2. 0 y / y % chg. fiscal 2020 fiscal 2019 + 1. 4 % cpi ( all items less fresh food ) fiscal 2021 + 1. 6 % ( y / y % chg. ) + 1. 1 % 1. 5 1. 0 0. 5 0. 0 - 0. 5 - 1. 0 fy 12 notes : 1. forecasts are the medians of the policy board members'forecasts ( point estimates ). the actual figures exclude the direct effects of the consumption tax hike in april 2014. 2. the direct effect of the scheduled consumption tax hike on the cpi for fiscal 2019 and fiscal 2020 is estimated to be 0. 5 percentage point for each year. the direct effects of policies concerning the provision of free education on

remains a risk that ongoing strains in global financial markets could have further implications for canada. while the average effective borrowing spreads faced by banks, non - financial businesses, and households have increased by about 75 basis points vis - a - vis the overnight rate since the onset of turbulence in financial markets last summer, this increase has been more than offset by the cumulative 150 - basis - point reduction in the target overnight rate. as a result, the effective borrowing costs faced by banks, businesses, and households are estimated to have fallen by about 75 basis points over the past year. chart 4 ( bank funding costs ) indicates one element of increased funding costs for banks. reflecting the recent contraction in economic activity and generally challenging credit market conditions, growth in business credit has slowed in recent quarters ( chart 5 : yield spreads on canadian corporate bonds ). in contrast, growth in household credit remains robust ( chart 6 : business and household credit ). this likely reflects high levels of employment and past increases in wealth and real income. nonetheless, the continued strength in household credit growth is somewhat surprising, given the moderation of activity in the housing market and the reported decline in consumer confidence. the growth of household credit is expected to moderate in coming months. recent economic developments the ongoing turbulence in global financial markets has been one of three major developments affecting the canadian economy – the others being the protracted weakness in the u. s. economy and the sharp changes in the prices of certain commodities, energy in particular. in the second quarter of 2008, u. s. economic growth was somewhat stronger than expected at the time of the july monetary policy report update, while growth in the japanese and european economies was somewhat weaker than expected. recent data also suggest that canadian gdp growth in the second quarter was likely somewhat weaker than expected. weakness in overall global growth has been a major reason for the downturn in commodity prices, particularly energy prices, since mid - july. in turn, this downturn has been a significant factor in the declining value of the canadian dollar in u. s. dollar terms. these two developments will have opposing effects on the demand for canadian goods and services. in july, total cpi inflation was 3. 4 per cent, and core inflation was 1. 5 per cent. the bank of canada continues to expect that both total cpi inflation and core inflation will converge on the 2 per cent inflation target in the second half of 2009. however, the recent decline in the spot and futures prices of energy means that the temporary spike in