in this cluster to flow - through more broadly to the rest of the 2 / 10 bis central bankers'speeches economy and gain momentum over time. the modern services cluster recorded mixed outcomes over the last two quarters but is poised for higher growth in the second half of this year. this cluster, comprising financial, business, and ict services, accounts for about 30 % of gdp. financial services saw a strong outturn in q4 last year but a sequential pullback in q1 this year, reflecting heightened political and geopolitical uncertainties globally which dampened investor sentiments. the performance of modern services is likely to improve as the global economy recovers and the upturn in the trade - related cluster raises business confidence and investments. the pickup in regional growth and trade should help anchor growth in lending and trade financing activities. demand for ict services will be boosted by government initiatives, as well as general it deepening that is occurring in singapore and the regional economies. the domestic - oriented cluster has had lacklustre growth and some segments are expected to remain weak. this cluster, accounting for 17 % of gdp, comprises retail and food services as well as construction activities. the real estate and retail segments will be weighed down by subdued consumer sentiment and the shift to overseas retailers via e - commerce. public construction will be supported by infrastructure projects, such as the ongoing extensions to the rail network, but private construction is likely to remain subdued. inflation has come in within expectations. both core and headline inflation are on a modest uptrend but underlying price pressures remain benign. mas core inflation is projected to average 1 - 2 % in 2017, up from 0. 9 % in 2016. the rise in core inflation since q4 2016 has largely reflected higher prices of oil - related items. domestic sources of inflation remain contained partly because the pass - through of business costs to consumer prices has been quite weak. cpi - all items inflation is expected to come in at 0. 5 - 1. 5 %, up from −0. 5 % last year. accommodation cost will likely continue to exert a drag on headline inflation generalised demand - induced price pressures have been relatively muted for some time. but mas is closely watching developments for the rest of this year, especially if upside risks to gdp growth materialise. monetary policy the current neutral stance of monetary policy has helped to stem disinflation pressures in the economy. mas has adopted a 0 % p. a. appreciation path for the s $ neer policy band

forward agenda of the fsb. i have had the pleasure and privilege of working with mark at many international meetings over the last three - and - a - half years, at the bis, the fsb, and the imf. there are many smart central bankers on the international circuit. there are also many sharp financial regulators. bis central bankers ’ speeches • but mark is one of the few who understand both worlds well, equally versed in the big, strategic issues related to macroeconomics and monetary policy and the nuts and bolts of financial markets and regulation. • it is this combination that has enabled mark to bring to our meetings a breadth of vision and depth of insight that make people sit up and listen. • he has a knack for “ herding the cats ” as it were, bringing people together and finding consensus in the cacophony of views that international meetings are noted for. • and mark does this with a cheery disposition, a witty sense of humour, and considerable charm. ladies and gentlemen, please join me in warmly welcoming mark carney. bis central bankers ’ speeches