We will be able to take a deeper insight into the economic growth slowdown after detailed GDP statistics are released. However, the 2018 data released in April and preliminary Q1 2019 estimates allow us to update our GDP forecast for this year. In particular, the revision is associated with lower export growth rates and a tempered outlook for growth in the global 1/3  BIS central bankers' speeches  economy and external demand. We have left the forecast for consumer and investment demand unchanged in view of the expected rise in public expenses in the second half of the year. As a result, we have updated the 2019 economic growth forecast from 1.2-1.7% to 1-1.5%. Third. Proinflationary risks have declined over a one-year horizon. First, we no longer expect any deferred effects of the VAT hike. Second, the US Fed consistently eased it rhetoric since the year start amid the expected slowdown of global economic growth. All else being equal, this constrains the risks of considerable capital outflow from emerging markets. In March-April, we noticed that the risks of accelerated growth in prices of certain food products diminished. Overall, they remain moderate, though current food inflation was somewhat higher in May than in the previous three months, seasonally adjusted. Moving forward, we expect that record crop areas, early spring, and overall favourable weather will bring a good harvest of vegetables, grains and other crops. Domestic and global grain prices have been down since the beginning of the year. This contains proinflationary risks for food products.
More so, the 7% of GDP cap was set a long time ago; yet another review is needed to establish whether this volume of liquid assets is adequate to resist to sharp and lengthy change in external conditions. As we review these and similar suggestions, we urge to fully consider the benefit and loss balance driven by change in macroeconomic conditions which may be tangible enough. Approaches to fiscal and structural policies will have a significant impact on both our forecast and estimates of the balance of risks for inflation. This will in turn determine the monetary policy path. 3/3  BIS central bankers' speeches