risk factors, especially now that the growth rates of overseas economies are rising moderately. b. japan's economy and prices 1. economic activity i will now discuss the economic situation in japan. japan's economy is expanding moderately, with a virtuous cycle from income to spending operating. the real gdp growth rate for the april - june quarter of 2017 was 0. 6 percent on a quarter - on - quarter basis, representing positive growth for six consecutive quarters for the first time in about 11 years. the growth rate was above the potential growth rate, which is estimated to be in the range of 0. 5 - 1. 0 percent. 1 with regard to the outlook, japan's economy is likely to continue its moderate expansion. through fiscal 2018, domestic demand is likely to follow an uptrend, with a virtuous cycle from income to spending being maintained in both the corporate and household sectors, on the back of highly accommodative financial conditions and fiscal spending through the government's large - scale stimulus measures. meanwhile, exports are expected to continue their moderate increasing trend on the back of growth in overseas economies. in fiscal 2019, the economy is expected to continue expanding, supported by external demand, although the growth pace is projected to decelerate due to a slowdown in domestic demand. 2 according to the october 2017 outlook for economic activity and prices ( hereafter the outlook report ), released by the bank of japan, the medians of the policy board members'under a specific methodology, japan's potential growth rate is estimated to be in the range of 0. 5 - 1. 0 percent. however, the estimate of the potential growth rate varies depending on the methodologies employed and could be revised as the sample period becomes longer over time. thus, it should be regarded as being subject to a considerable margin of error. it is assumed that the consumption tax will be raised to 10 percent in october 2019 and that a reduced tax rate will be applied to food and beverages - - excluding alcohol and dining - out - - and newspapers. forecasts of the economic growth rate are 1. 9 percent for fiscal 2017, 1. 4 percent for fiscal 2018, and 0. 7 percent for fiscal 2019. 2. prices let me now explain price developments. the year - on - year rate of increase in the consumer price index ( cpi ) for all items less fresh food has been accelerating and is in the range of 0. 5 - 1. 0 percent

) have fallen by around 120 basis points since june 2014, a large proportion of which can be attributed to the impact of our measures. moreover, the decline has been more marked in those countries that suffered more acutely from financial fragmentation during the crisis, showing that our measures have not only provided the necessary monetary accommodation, but also rehabilitated the transmission mechanism to ensure an even transmission of monetary policy throughout the euro area. loans to nfcs – sharply down when we introduced our unconventional measures – are growing again, and reached an annual growth rate of 2. 9 % in december 2017. taking these factors together, the overall impact of the ecb ’ s policy measures since mid - 2014 are estimated to have contributed significantly to output growth – and by around half a percentage point in 2017. while our measures have clearly played a decisive role in keeping inflation expectations anchored and have contributed to an improved inflation outlook, an ample degree of monetary accommodation remains necessary to secure a sustained return of inflation rates towards levels that are below but close to 2 %, as reaffirmed by the governing council at last week ’ s meeting. despite the strong cyclical momentum, domestic price pressures remain subdued, as do measures of underlying inflation. the evolution of the ecb ’ s forward guidance our monetary policy stance is determined by the combination and mutual interaction of our asset purchase programme, our policy rates and our forward guidance on each of these tools. the stimulus provided by these policy tools is complemented by the tltros, which will remain outstanding for the next three years. when our key policy rates reached exceptionally low levels, asset purchases became the main monetary policy instrument for calibrating our stance. this is why, since january 2015, when the app started, we have been signalling the traditionally tight connection between the ecb ’ s 2 / 5 bis central bankers'speeches monetary policy and our price stability objective by linking an assessment of the medium - term outlook for inflation to the size and duration of our net asset purchases. accordingly, when communicating about net purchases, we have expressed our intention to continue with our chosen pace of monthly purchases until we see “ a sustained adjustment in the path of inflation consistent with our inflation aim ”. this phrase describes the key contingency that has guided the course of our policy in the past few years and will continue to do so in the future. in addition, the pledge to re - invest the proceeds from the principal payments that accrue from the maturing securities in our portfolio should be