Moreover, domestic uncertainties, the weak course of the confidence indices, and volatility in financial markets driven by global monetary policies may limit the contribution of final private demand to growth. Despite the existence of these factors keeping the downside risks alive, the robust employment performance following the global crisis along with low oil prices generate room for domestic demand and economic policies by improving the current account balance and the inflation outlook. In addition, the expected correction in the agricultural value added emerges as a factor that may support growth on the production side. Against this background, we project the second half of 2015 to witness a sustained moderate growth and demand conditions that support disinflation. In line with the favorable developments in the terms of trade coupled with the slowdown in consumer loans, the recovery trend in the current account balance is anticipated to continue in the upcoming period; yet the weak course of external demand may limit this recovery to some extent (Chart 19). As you all know, food, energy and import prices also play a great role in inflation forecasts. Therefore, before moving on to forecasts, I will briefly talk about our assumptions regarding these variables. In the second quarter of 2015, oil prices stood slightly above the path projected in the previous report, while USD-denominated import prices remained below projections (Chart 20). On an annual basis, we lowered average oil price assumption by 2 percent for 2015, and by around 6 percent for 2016.
Accordingly, we revised assumptions for annual percentage changes in average import prices downwards by 1.7 points for 2015 and 1.4 points for 2016. Developments in food prices show that unprocessed food prices exhibited a notable correction in the second quarter of 2015 and the contribution of food prices to inflation witnessed a significant decline. Due to the projections that this correction will continue and the effects of measures taken by related institutions will materialize, we revised the food inflation assumption for end-2015 downwards from 9 percent to 8 percent. Our medium-term projections are based on the assumption that tax adjustments and administered prices will not exceed inflation targets and be consistent with automatic pricing mechanisms. The medium-term fiscal policy stance is based on the Medium Term Program projections covering the 2015-2017 period. Accordingly, we assume that a cautious fiscal  4  BIS central bankers’ speeches  stance will be implemented and the primary expenditures to the GDP ratio will decrease gradually. 3. Inflation and the monetary policy outlook  Now, I would like to present our inflation and output gap forecasts based on the outlook I have described so far. Our medium-term forecasts are based on a framework that a cautious monetary policy stance will be maintained by keeping the yield curve flat until there is a significant improvement in the inflation outlook. Moreover, we envisage that the annual loan growth rate will continue to hover around the recent reasonable levels in 2015, also thanks to the macroprudential measures.