Today, the National Bank Council held its first session. At the session, the National Bank Council discussed the latest Quarterly Report, whereby it was determined that the interest rate on auctions of CB bills was maintained at 3.25%, in economic and financial conditions that show appropriate current monetary setup.
Today, the National Bank Council held its first session. At the session, the National Bank Council discussed the latest Quarterly Report, whereby it was determined that the interest rate on auctions of CB bills was maintained at 3.25%, in economic and financial conditions that show appropriate current monetary setup.
Key macroeconomic parameters in the domestic economy generally moved in line with the projections of the October cycle. Gross domestic product in the third quarter registered an annual growth of 3.5%, which is consistent with the October projection, although the growth rate is slightly higher than expected. Unlike the previous period, individual key driver of growth in the third quarter is the private consumption, at constant positive developments on the labor market and strengthening of lending to households. Lower energy prices had an additional contribution to the growth of consumption, through their positive impact on households.
Performances in the third quarter, as most available high-frequency data for the last quarter of the year point to keeping the economy in the area of solid growth, in line with the October projection for GDP growth of 3.2% in 2015. The projected GDP growth for 2016 and 2017 is 3.5% and 4%, respectively, whereby it is expected that the main bearer of growth will represent the export sector and investments, which will generate positive spillover effects on the labor market and will further stimulate household consumption.
Within the external sector, in the third quarter of 2015 the current account showed a surplus of Euro 142.4 million, or 1.6% of GDP, which is slightly better position in the current account than expectations, with better trade balance. Also, the financial account registered net outflows of Euro 188.4 million or 2.1% of GDP, which primarily reflects increased net liabilities based on trade credits. The realized net financial outflows in the third quarter were slightly higher than planned and were in line with the expectations for this period that some of the transactions in the balance of payments will be financed through foreign reserves.
Overall, recent developments suggest further maintenance of foreign reserves at the appropriate level, reduced inflationary pressures and strengthened lending support of the economic growth by the banking sector. For 2016 and 2017 is again expected inflation rate of 1.5% and 1.6%, respectively, and the risks around the projection are downwards amid continuous downward corrections to estimations for the prices of oil and food. However, it should be borne in mind that the movement of prices of primary products, in addition to the conditionality on temporary factors, is currently faced with the intensified geopolitical factors, with the uncertainty around their projection, will be relatively large in the period ahead.
At today's meeting, the Council discussed and adopted the Decision on the criteria and standards for payment system operations and the Decision on the manner and the methodology for payment systems oversight which enable application of the Principles for financial market infrastructures, including the Disclosure framework and Assessment methodology, which were adopted by the Committee on Payment and Settlement Systems at the Bank for International Settlements and the Technical Committee of the International Organization of Securities Commissions. Also, the approach of the European Central Bank for the classification of payment systems in three categories (systemically important payment systems, important payment systems and other payment systems) and the respective obligations of individual classified payment systems in the fulfillment of the principles and respective main requirements. The classification of individual payment system depends on its financial impact and the market penetration, as well as its role in the settlement of transactions by other payment systems or securities settlement systems. With the application of this regulation, through off-site and strengthened off-site oversight, it is expected to improve the efficiency and safety of payment systems in the Republic of Macedonia.
The Council also discussed other matters within its jurisdiction.