likely to be around 1¼ percent for some time, and follow a rising trend again from the second half of fiscal 2014. the bank compiles and releases the policy board members ’ forecasts for economic activity and prices on a quarterly basis. looking at the medians of the members ’ forecasts released in july, the real gdp growth rate is projected to be 1. 0 percent for fiscal 2014, 1. 5 percent for fiscal 2015, and 1. 3 percent for fiscal 2016. japan ’ s economy is expected to continue growing at a pace above its potential rate, which is assumed to be around 0. 5 percent. the year - on - year rate of increase in the cpi ( all items less fresh food ), excluding the direct effects of the consumption tax hike, is projected to be 1. 3 percent for fiscal 2014, 1. 9 percent for fiscal 2015, and 2. 1 percent for fiscal 2016. the bank judges that it is likely to reach around 2 percent – the price stability target – around the middle of the projection period, which runs through fiscal 2016. 3. points that require attention in terms of japan ’ s economic activity and prices for the time being and near future, i am paying close attention to the following points. the first is developments in private consumption. for the time being, close watch should be kept on whether private consumption, which has been driving japan ’ s recovery so far, will overcome the effects of the decline in demand following the front - loaded increase prior to the consumption tax hike and return to a recovery path as expected from the july – september quarter of 2014. let us look at movements in the cpi ( all items less imputed rent ) 1 – a price index that reflects actual household consumption expenditures and is used to deflate such figures as wages. the year - on - year rate of increase for june 2014 was 4. 4 percent, more than 1 percentage point above the core index, which is behind the recent substantial decline in real wages. as for recent developments, the rate of increase – after reaching 1. 9 percent in november 2013 – remained around 2 percent through june 2014, excluding the direct effects of the consumption tax hike. for private consumption to remain resilient in such circumstances, it is vital to have an increase in expectations for future income growth. factors such as increases in summer bonuses are expected to support private consumption for now, but in the future developments in labor supply and demand conditions are likely to become the key. turning to

given that securency also used agents, it was considered necessary to have a similar audit at securency. although securency had its own external auditors, the senior management of the reserve bank agreed with mr thompson that, in his capacity as chairman of securency ’ s board, he would ask the reserve bank audit department to conduct the audit, due to their experience with the npa audit. mr thompson subsequently emailed the head of audit, asking for the audit to be undertaken, with the scope of the audit to be similar to that carried out at npa. the securency board meeting on 3 – 4 july noted this had occurred. it also endorsed a decision that had been taken by the securency management to terminate the malaysian agent. the same audit team that had conducted the audit at npa conducted this audit at securency. the audit began on 18 june. at the same time, securency also suspended its payments to agents, pending the result of the audit. the securency audit report was issued on 1 august 2007. the conclusion was that securency had a “ good and robust process ” in relation to the use of agents, and that securency ’ s practices were consistent with the company ’ s policy. the audit made a number of recommendations. the audit team supported securency ’ s termination of the malaysian agency agreement, which took effect from 15 july 2007. the securency board was informed at its 11 – 12 september 2007 meeting that the audit recommendations had been implemented. the findings provided no basis to insist on the termination of securency ’ s other agents. the suspension of payments to agents was therefore lifted. a copy of the securency audit report was forwarded by mr battellino to the reserve bank audit committee and the results of the audit were also noted at the august 2007 meeting of the reserve bank board. the following year – in december 2008 – a further audit of agent activity at securency was undertaken. it reached similar conclusions as the 2007 securency audit. post - termination payments to agents by npa the npa board considered what payments were due to agents who had been terminated. it sought legal advice on the question of payments to one agent in particular. after a lengthy process of legal advice which concluded that the agent would likely succeed in a legal action claiming an entitlement to commission, npa management proposed at the 26 september 2007 npa board meeting that a commercial settlement be sought. on the basis of the legal advice received, the npa board