to the previous quarter. combined with the other indicators for june, we expect the industrial production to record a quarterly increase in the second quarter. sales, production, and import indicators regarding domestic demand show that the final domestic demand will continue with an uptrend stemming from consumption demand. investment indicators, on the other hand, signal that the weak outlook will remain in the second quarter. the export quantity index excluding gold increased at a modest rate in the april - may period following the contraction in the first quarter, while imports excluding gold maintained their uptrend suggesting that the contribution of external demand to economic growth may be limited in the second quarter ( chart 18 ). the recovery in economic activity is projected to continue in the upcoming period, yet risks to growth exist. downside risks regarding external demand persist due to geopolitical developments and troubles in europe. 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

simple interest rate rule based on the bank ’ s previous interest rate setting. 5 the rule includes developments in inflation, wage growth, mainland gdp and central bank key rates abroad. the interest rate in the previous period is also important. the key rate is now below the lower end of the interval projected. norges bank has given weight to staving off particularly adverse outcomes and therefore brought forward the decrease in the key policy rate last autumn. the projections for the key rate, inflation, output and other variables are based on our assessment of the economic situation and our perception of the functioning of the economy and monetary policy. if economic developments are broadly in line with our projections, see staff memo 2008 / 3 from norges bank. economic agents can expect that the interest rate path will also be approximately in line with that projected. on the other hand, the interest rate path may shift if the economic prospects change, or if the effect of interest rate changes on inflation, output and employment differs from that assumed. in the monetary policy report, we present two alternative scenarios where demand is higher or lower than presented in the baseline scenario. the yellow lines in the chart illustrate a scenario where growth in private consumption is stronger than expected and the turnaround occurs more rapidly. in this scenario, interest rates may decrease to a lesser extent and move up more quickly. the red lines in the chart illustrate a scenario where the global downturn is deeper and more prolonged, with more pronounced effects than assumed. it will then be appropriate to set a lower interest rate in order to stimulate the economy and thereby prevent inflation from becoming too low. the primary effect of a key rate close to zero will probably come via a weaker krone. it will then be appropriate to consider instruments other than the interest rate. monetary policy normally operates by lowering key rates to reduce the real interest rate when expected inflation and market risk premiums are stable in the short term. when the key rate moves close to its lower bound, the real interest rate can still be influenced through key rate expectations, influencing risk premiums and anchoring inflation expectations. the expectations channel will be particularly important if the current key rate cannot be further reduced. for norges bank, the expectations channel is an established part of monetary policy in that we provide forecasts for the key policy rate. to sum up, it is useful to decompose the factors behind the change in the interest rate path since 17 december 2008. the interest rate forecast in the monetary policy report is lower than the