also registered high growth of 0. 7 percent – the highest level since august 1998 – for two consecutive months through january 2014. regarding the outlook, the yearon - year rate of increase in the cpi, excluding the direct effects of the consumption tax hike, is likely to be around 1 – 1 / 4 percent for some time. according to the bank of japan ’ s interim assessment released in january 2014 of the october 2013 outlook for economic activity and prices ( hereafter the outlook report ), the median of the policy board members ’ forecasts for the real gdp growth rate was 2. 7 percent for fiscal 2013, 1. 4 percent for fiscal 2014, and 1. 5 percent for fiscal 2015. the median of their forecasts for the year - on - year rate of increase in the cpi, excluding the direct effects of the consumption tax hikes, was 0. 7 percent for fiscal 2013, 1. 3 percent for fiscal 2014, and 1. 9 percent for fiscal 2015. ii. risks to the outlook for economic activity and prices although there are both upside and downside risks to the bank ’ s aforementioned baseline scenario regarding economic activity and prices in japan, i personally pay closer attention to downside risks. the consumption tax hikes are unlikely to affect the ongoing moderate recovery trend, although they may temporarily cause greater fluctuations in economic activity. however, i am paying particular attention to developments in exports and consumption as downside risks to the economy. in addition, as revealed in, for example, the minutes of the monetary policy meetings ( mpms ), i personally hold a more cautious view of the outlook for prices compared with the forecasts in the baseline scenario. let me share some of my considerations regarding the outlook with you. a. developments in exports exports have continued to slightly lack momentum. this reflects both external demand factors and other factors, and i consider that exports are likely to continue to lack momentum for some time. regarding external demand factors, it must be noted that asian economies that are japan ’ s major export destinations still lack momentum. for example, looking at developments in the chinese economy since the beginning of 2014, the purchasing managers ’ index ( pmi ) for manufacturing activity for february marked its lowest level since the middle of 2013, and, in parallel with the progress in implementation of measures to cope with structural problems, there are signs of sluggishness in the pace of increase in fixed asset investment. in addition, bis central bankers ’ speeches there is uncertainty regarding the outlook

the increase in prices since the introduction of qqe. therefore, in my view, if the cumulative effects of monetary easing generated by maintained zero interest rates, in addition to easing effects of qqe, increase further going forward, one option is to gradually shift the focus of monetary policy conduct from the asset purchase policy to the zero interest rate policy, in view of the role of the two policy tools as well as the balance of their positive effects and side effects. precisely because the unconventional policy is a new policy measure with a short history, its side effects in general could still have many unknown parts. in particular, in the future, in order to achieve the smooth normalization of monetary policy while maintaining financial market stability, i consider that aiming to make such a shift in the focus of monetary policy conduct, together with the government ’ s fiscal consolidation, will become the important requirement. the taylor rule is a monetary policy rule under which the level of a benchmark policy interest rate is calculated based on a particular formula using, for example, the deviation of the observed inflation rate from the targeted inflation rate, and the output gap. bis central bankers ’ speeches