global tech cycle and growing trade tensions. the modern services cluster will be the main driver of growth this year, supported by healthy regional demand and increased investments in digitalisation as the domestic economy undergoes transformation. domestic industries will make a modest, positive contribution to overall growth, as the construction sector turns around, and retail and f & b benefits from firm labour demand conditions and efforts to lift productivity. inflation and monetary policy inflation in singapore remains subdued and within expectations. mas core inflation this year is expected to come in near the mid - point of the forecast range of 1 – 2 %. while there will be some domestic cost pressures from firm labour market conditions, underlying inflationary pressures should remain contained. first, the slower pace of gdp this year is expected to close the positive output gap. in recent years, gdp was growing faster than potential. second, the fall in global oil prices in q4 2018 and the deregulation of the electricity distribution market have exerted a dampening effect on inflation. third, the two rounds of monetary policy tightening last year by mas will continue to have a restraining effect on inflation. cpi - all items inflation for the year is projected to be between 0. 5 and 1. 5 %. private road transport costs could pick up slightly from 2018 with higher car prices more than offsetting lower petrol prices. accommodation costs are likely to decline, but at a slower pace this year. overall inflation in singapore remains well below the historical average. mas ’ monetary policy stance remains appropriate against the backdrop of subdued inflation and weakening growth prospects. last year, mas began the process of monetary policy normalisation by exiting from the zero percent appreciation path of the nominal effective exchange rate ( s $ neer ) policy band. mas increased slightly the slope of the policy band in april 2018 and again in october 2018, against the backdrop of healthy economic growth and gradually rising inflation. in april this year, with inflationary pressures stabilising and the output gap beginning to narrow, mas kept the policy stance unchanged. our current stance of a modest and gradual appreciation path of the s $ neer policy band will help to keep the economy close to potential and ensure medium - term price stability. financial stability globally, risks to financial stability remain elevated, amidst high levels of indebtedness. in the eurozone, the large exposure of banks to government securities means the risk of a sovereign - bank debt crisis remains. in the us, corporate debt has increased by 30 % since the global financial crisis, with

from that, mas recorded a net profit of s $ 19. 2 billion, after contributing s $ 3. 9 billion to the government ’ s consolidated fund. the investment return of s $ 26. 2 billion in fy2018 / 19 is relatively high and reflects mainly the effects of an increasingly larger ofr base. first, the income from investing a larger stock of assets would be higher. second, realised gains would also be higher, as a larger ofr base means a higher turnover of securities for rebalancing and other portfolio transactions. we do not expect investment returns to be sustained at these high levels as the ofr 8 / 11 bis central bankers'speeches base will now be smaller after the transfer of s $ 45 billion to the government. income from a smaller portfolio will be less, and portfolio transactions are also likely be fewer. mas returned to government the full net profit of s $ 19. 2 billion and another s $ 16. 0 billion from its general reserve fund, making a total of s $ 35. 2 billion. mas decided to return this amount to government as a smaller ofr base would mean that we need less capital and general reserves as buffer. this does not mean that the government is getting s $ 45 billion and another s $ 35. 2 billion. the return to government increased its deposits with mas by s $ 35. 2 billion. as explained earlier, the transfer of s $ 45 billion of ofr to the government will reduce its deposits with mas by s $ 45 billion. financial sector let me conclude with a quick update on the financial sector. mas ’ various regulatory and developmental initiatives are detailed in the annual report, so i will provide just a high level overview of the sector ’ s performance. in 2018, the financial services sector did very well, growing at 6. 1 %. 1 this brings the three - year average growth rate of financial services to 4. 1 %, which is within striking distance of the industry transformation map ( itm ) target of 4. 3 % per annum over 2016 – 20. in 2019, financial services is expected to grow slower but should continue to outpace the overall economy. prospects for financial intermediation are mixed, with credit demand weighed down by a slowing chinese economy, though loans to southeast asia are showing a bit more resilience. the picture for insurance is more promising, on the back of growing demand for insurance products catering to high net worth and mass affluent customers in the asia - pacific.