campaigns overseas to invite tourists, a helpful visitor information center, informative brochures, and multilingual signposts. from 2011 to 2012, the number of tourists from abroad dropped because of the accident at the fukushima nuclear power plant and the developments in relations between japan and china. however, international tourists have been coming back of late. i expect that efforts to attract tourists both from japan and overseas will further promote development of the tourist industry in the region. bis central bankers ’ speeches the bank will continue to provide support as much as possible as the central bank, so that efforts in each economic sector of the prefecture will pay off. bis central bankers ’ speeches note : charts are based on data released prior to april 15, 2013. ( chart 1 ) world economic growth rate % 6. 00 5. 00 4. 00 3. 00 2. 00 1. 00 0. 00 - 1. 00 1996 97 99 2000 01 source : imf, “ world economic outlook. ” ( chart 2 ) corporate profits and business fixed investment tril. yen current profits business fixed investment source : ministry of finance, “ financial statements of corporations by industry. ” bis central bankers ’ speeches ( chart 3 ) stock prices ( topix ) 2, 000 1, 800 1, 600 1, 400 1, 200 1, 000 2012. 1 2010. 1 2008. 1 2006. 1 2004. 1 2002. 1 2000. 1 1998. 1 1996. 1 1994. 1 source : bloomberg. ( chart 4 ) potential growth rate of japan ’ s economy % 2. 50 2. 00 1. 50 1. 00 0. 50 2012. 1 2011. 1 2010. 1 2009. 1 2008. 1 2007. 1 2006. 1 2005. 1 2004. 1 2003. 1 2002. 1 2001. 1 2000. 1 1999. 1 1998. 1 1997. 1 1996. 1 1995. 1 1994. 1 0. 00 source : bank of japan. bis central bankers ’ speeches ( chart 5 ) medium - to long - term expected rate of inflation [UNK] inflation expectations ( 6 ‑ 10 years ahead ) note : figures for inflation expectations are based on the averages of the april and october results of the consensus forecasts, a survey conducted on private sector forecasters. source : consensus economics inc., “ consensus forecasts. ” ( chart 6 ) path toward achieving the 2 percent inflation target expected change in situation effects on economic activity and prices ( 1 ) normalization of overseas →bolster

public ’ s inflation expectations will likely rise gradually. these expectations are affected by developments in actual inflation rates, the medium - to long - term trend of inflation rates, and the prospects for economic recovery. it is not unrealistic to assume a rise in the public ’ s inflation expectations if deflationary sentiment is dispelled, the actual inflation rate rises, and prospects for sustainable economic recovery become widely acknowledged under the 2 percent price stability target, together with the effects of monetary easing by the bank. let me briefly summarize what i have covered. the path toward achieving the 2 percent price stability target can be described as follows ( chart 6 ). first, the normalization of overseas economies will bolster the recovery trend in japan ’ s exports and production, thereby increasing corporate profits. second, the continued risk - on trend and gradual rise in u. s. long - term interest rates, as well as strong monetary easing by the bank, will support accommodative financial conditions, reflected even in asset prices and foreign exchange rates. third, this will encourage firms ’ positive initiatives to make fixed investment and implement structural reforms, which will in turn bring a gradual rise in the potential growth rate of japan ’ s economy. fourth, on the expectation of sustainable economic recovery, firm household spending should be maintained and prices should gradually increase accompanied by the narrowing of the negative output gap. fifth, the public ’ s inflation expectations will rise gradually, and in this situation the inflation rate is likely to rise above 1 percent during fiscal 2014 – more specifically, as of january 2013, the median of the policy board members ’ forecasts of the year - on - year rate of change in the cpi for fiscal 2014 is bis central bankers ’ speeches 0. 9 percent. and sixth, thereafter, in a situation where the virtuous circle of a five - stage path is maintained, economic recovery will be sustained and the public ’ s expected rate of inflation and the medium - to long - term trend inflation rate will likely increase further toward 2 percent. as a result, the actual inflation rate is projected to continue to rise, approaching the 2 percent price stability target. as illustrated, the 2 percent target will likely be achieved as the inflation rate rises in balance with a sustainable economic recovery. it should be noted that, during the 2003 – 2006 period, japan experienced the same virtuous circle as the path i have just described. during this period, the prospect of resolving banks ’ nonperforming