and 2020, respectively. such is higher than the gdp growth forecasts for thailand ( 2. 4 and 2. 8 % for 2019 and 2020, respectively ), indonesia ( 5. 0 and 5. 2 % ), and malaysia ( 4. 5 and 4. 3 % ). on inflation, price pressures have been dissipating since late 2018 with average headline inflation at 2. 5 % for 2019. this is well within the government ’ s 2 - 4 percent target range for the year. looking ahead, the latest baseline forecasts indicate that inflation is projected to average 2. 9 % for both 2020 and 2021. the balance of risks to future inflation appears to be weighted toward the upside for 2020 but remains tilted to the downside for 2021. petitions for electricity rates and transport fare adjustments, the proposed increase in excise taxes on alcoholic beverages, the impact of african swine fever ( asf ) on meat prices, and higher global oil prices are seen as the main upside risks to inflation. meanwhile, slower global economic growth due to the escalation of protectionist policies in advanced economies as well as geopolitical tensions continue to be the main downside risks to inflation. equally important, inflation expectations – based on forecast surveys of private sector analysts – have remained manageable and well within the government ’ s 2 - 4 % target range. results of the bsp ’ s survey of private sector economists for november 2019 showed unchanged mean inflation forecasts for 2019 to 2021. last year, the monetary board ( mb ) cut the bsp ’ s policy interest rate by a total of 75 bps and the reserve requirement ratio by a total of 400 bps. the mb believes that prevailing monetary policy settings remain appropriate, supported by the benign inflation outlook and a strong positive outlook for domestic economic growth. in terms of the policy rate outlook for 2020, the bsp will always be data dependent with its decisions. that is, each policy decision will 2 / 7 bis central bankers'speeches be based on all the available information to monetary authorities at the time of its decision. for this reason, the bsp will continue to closely monitor economic conditions and on making reasonable assumptions about the future when formulating its monetary policy. while emphasis is given to inflation and inflation expectations, we also consider a wider set of economic variables and their dynamics in deciding on monetary policy. the bsp examines demand conditions, domestic liquidity and credit, financial market variables, and the external landscape in deciding whether adjustments

which leads to such inflationary effects that a monetary policy reaction is motivated, and a change which does not require any such reaction? presumably, today's increased competition is only part of the whole picture of developments, in the same way that tax increases were during the 1970s and 1980s. at that time, not taking into account the fact that tax increases were part of the inflation process was a considerable policy mistake. in the same way one can ask whether the effects of deregulation and other effects of international competition should really be taken into account today. there are fundamental arguments against the idea of discounting considerable aggregates of goods that have been hit by price falls. what central banks should be trying to do is to stabilise general price levels and not to counteract changes in relative prices. this is to do with the fact that it is general price levels that can be influenced by monetary policy, and not the prices of items such as meat or nails. this is also to do with the fact that the positive effects of stable monetary value manifest themselves precisely because the players in the economy can rely on purchasing power which is not undermined. at the same time the riksbank has, in various contexts, maintained that there can be reasons for ignoring effects on inflation which are thought to be temporary. the reason for this is that it is not often possible to influence inflation quickly enough to counteract transitional price impulses without this leading to larger real disruptions. we have said, however, that we shall give as clear an account as possible of what the temporary effects are and how we deal with them. when examining the formulation of monetary policy in situations involving considerable pricemoderating effects, it can also be a good idea to give some reflection to the time perspective of monetary policy. one possibility is that the visible effects ebb away quickly, even though they occur beyond the normal policy horizon. in that case, presumably, one should be careful not to stimulate the economy too much. the opposite would apply if inflation were forced up strongly by some effect which could be expected to dissipate beyond the 2 - year horizon. this is obviously a difficult question of judgement. should a forecast change in prices be considered to be temporary or not? is there a future risk of inflation rising or falling rapidly? 2. asset prices the next question concerns the importance of asset prices as regards the formation of monetary policy. asset prices are not included in the inflation index, which we normally try to stabilise.