Net exports thus increased their negative contribution to annual GDP growth, while, on the supply side, the services sector had further a prevailing contribution to the pick-up in economic activity.
According to the central bank, real monetary conditions remained stimulative, underpinning the favorable developments in credit to the private sector, including in terms of the currency breakdown. The annual growth rate of leu-denominated loans stood at 14.5 percent in real terms in August, while the annual dynamics of foreign currency-denominated loans remained strongly negative at -12.9 percent.
“Against this background, the share of leu-denominated loans in total loans to the private sector climbed to 55.9 percent versus a 34.6 percent low in May 2012. These developments confirm the improved monetary policy transmission, while also helping mitigate the risks to financial stability,” the central bank said.
Recent assessments reconfirm the outlook for the annual inflation rate to remain in negative territory until end-2016. Thereafter, the annual inflation rate is expected to pick up gradually and return inside the variation band of the flat target in 2017 H2, amid the fading-out of the effects exerted by the standard VAT rate cuts and by global disinflationary shocks, along with inflationary pressures from aggregate demand and unit wage costs.
Risks to the inflation outlook stem from elevated uncertainties surrounding both the domestic and external environments.
The central bank on Friday left its benchmark interest rate unchanged at a record low 1.75% a year, but lowered minimum required reserve ratios on foreign currency liabilities to 10% from 12%.
It kept minimum reserve requirement ratios for local currency deposits unchanged at 8%. The key rate has remained unchanged since May 2015.