Reduced reference interest rate signaling banks to invest in economy

The decision of the National Bank of Macedonia (NBRM) to reduce the interest rate is quite clear sending a signal to banks to invest more in the economy, industry and private sector, Premier Nikola Gruevski said Saturday. "Banks are largely liquid, which means they have significantly reduced loaning. This is a way to encourage them to finance the economy and private sector and to lend a hand in these difficult times," Gruevski said. At the same time, he added, it is a signal that Macedonia has a sound and stable macroeconomic situation. "The fact that Macedonia is one of the least indebted countries, its stable currency, low inflation and an array of other macroeconomic indicators show that Macedonia has been having a stable and sound economic policy without posing risks for the future," Gruevski said. Commenting NBRM's decision to downgrade the economic growth projections for 2012, the PM stated it was a minor revision that was close to the government's projection. "Government's growth projection is 2.5% and NBRM's is 2 percent... Regardless of which growth will be achieved, it will be one of the higher growth rates considering Europe's debt crisis. However, it is not something that should make us content. In fact, it will be favourable for Macedonia to manage to achieve these growth rates in such circumstances when the whole of Europe is in recession and is facing low growth rates," Gruevski noted. The government is not able to affect the economy in Europe, but pledges to take measures to alleviate the negative effects of the debt crisis, according to him. Answering a journalist question, PM Gruevski said the government had made many efforts to improve economic conditions and country's investment climate. "Macedonia has been highly ranked by the World Bank and many other financial institutions with regard to its conditions for starting a business and is ahead of many countries in the region," he concluded.