Bank of Japan Gov. Haruhiko Kuroda will fail to reach his goal of stable 2% price growth during his term, after what will have been more than a decade of stimulus to stoke inflation, according to the bank’s latest forecasts.

Even with an economy expected to show a faster recovery from the COVID-19 pandemic, a slew of rising commodity costs and global expectations for accelerating inflation, the BOJ still couldn’t find enough positive factors to see price growth averaging 2% by the end of March 2024.

The central bank released its latest projections after leaving unchanged its interest rate and asset purchase settings, as had been widely expected. While it now sees stronger economic growth of 4% in the year started April and 2.4% the following year, it cut its inflation forecast for the current fiscal year to just 0.1%, citing cheaper mobile phone bills.

The latest projections lay bare the challenge the BOJ faces in completing a mission Kuroda initially hoped to achieve in about two years.

While Kuroda will probably continue to insist that temporary factors won’t knock back the underlying inflation trend, the nagging reality is that he has little price growth to show for the world’s most ambitious experiment to reflate an economy.

“It’s hugely symbolic that even Kuroda can’t hit the target after a decade,” said Hideo Kumano, executive chief economist at Dai-Ichi Life Research Institute and a former BOJ official. “That again raises the question of whether the 2% inflation goal really is the right one for Japan.”

Kuroda launched his massive easing program in April 2013, with a firm intention of shaking up the psychology of consumers and companies and convincing them that inflation was coming soon. Even before the pandemic struck, the BOJ had stacked up enough bonds and stock funds to outsize Japan’s economy in pursuit of the goal.

Last month’s policy review, the biggest since 2016, was another step back from the bold strategy originally set out. The bank effectively streamlined its stimulus program so it could more flexibly pursue its goal, while acknowledging that it won’t achieve it anytime soon.

The latest decision and projections will further cement the view that the BOJ is likely to keep its stimulus unchanged well beyond global peers such as the Federal Reserve and the European Central Bank, even if Japan’s economy is regaining traction at a faster-than-expected pace.

The 2% goal was a cornerstone of Abenomics, a project started in 2013 to more closely coordinate policy between Japan’s government and the central bank and help reinvigorate the world’s third-largest economy.

That close coordination has helped Japan weather the storm of COVID-19 better than many countries, with record public spending financed by borrowing at rates the central bank helps keep ultralow. But the relationship no longer seems entirely reciprocal.

Yoshihide Suga, Shinzo Abe’s successor as prime minister, appears less committed to the inflation goal than his former boss. Suga has repeatedly demonstrated he is more concerned about the day-to-day reality of voters’ pocket books than the theoretical importance of forming stronger inflation expectations.

Even before the pandemic, Suga’s insistence that cell phone fees should be lowered by around 40% as soon as possible showed he prioritized putting cash in shoppers’ wallets above generating imagery of rising prices in shoppers’ heads. Travel subsidies he spearheaded last year also dragged down the monthly overall price index by as much as 0.4 percentage point.

“The issue with these government policies is that they could strengthen a deflationary mindset if they continue,” said economist Harumi Taguchi at IHS Markit, who called for more reforms to help Japan’s economy grow and power price growth. “What’s needed are what the government calls structural reforms. The underlying growth potential needs to be pushed up so there’s a positive impact for consumers.”

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