10 8  6 4 2 0 -2  Source: NBR  Debt instruments (intercompany lending)  2017p  2016  2015  2014  2013  2012  2011  Reinvested profit  2018H1p  Equity investments  2010  2009  2008  2007  2006  2005  -4  Figure 17. Inflation will stay in the target band in 2018 and 2019 CPI inflation  Source: NIS, NBR  CORE 2 adjusted inflation  Figure 18. Exchange rate evolution 107  250  1 January 2018 =100  106 200  105 104  150 103 102 100 101 100  50  99 98 1-Jan-18  0 1-Feb-18  1-Mar-18  EURRON Source: Reuters  1-Apr-18  EURPLN  1-May-18  EURCZK  1-Jun-18  EURHUF  1-Jul-18  EURTRY (rhs)  1-Aug-18  EURARS (rhs)  Figure 19. 5 year yield of FX government bond 11  9  7  5  3  1  -1 29-Dec-17  29-Jan-18  PL_5Y(eur) Source: Bloomberg  28-Feb-18  31-Mar-18  CZ_4Y(eur)  30-Apr-18  RO_5Y(eur)  31-May-18  30-Jun-18  TR_5Y(usd, rhs)  31-Jul-18  AG_8y(usd. rhs)  31-Aug-18  Figure 20. 10 year yield of FX government bond  10  8  6  4  2  0 2-Jan-18  2-Feb-18  PL_10Y Source: Bloomberg  2-Mar-18  CZ_18Y  2-Apr-18  RO_10Y  2-May-18  2-Jun-18  TR_10Y(usd, rhs)  2-Jul-18  2-Aug-18  AG_10Y(usd, rhs)  Figure 21.
Structural reforms are incomplete and a possible roadmap for euro-accession or just for further convergence cannot be done without a detailed program of these reforms which should cover governance issues (both in the public and private sectors), investment prioritization, better tax collection, broader reporting, centralized procurement, addressing the issue of companies with negative capital, and much more. In the financial sector, the recent Financial Sector Assessment Program undertaken by the IMF and WB has issued a number of recommendations for structural reforms, including a series of macroprudential policies which the National Bank has already started to implement. Agustin Carstens, General Manager of the Bank for International Settlement, said at the presentation of the 2018 Annual Report in Basel: “We must seize the day. Addressing vulnerabilities is key to keeping the growth momentum on track. The stronger performance gives us a window to pursue necessary reforms and recalibrate policies. Let’s not miss this opportunity”. On this note, let me conclude here and wish you all not to miss the opportunities. 7  Figure 1. Real and potential GDP* 1060 1055 1050 1045 1040 1035  GDP  Potential GDP  Source: NBR Note: *logarithmic scale = computed as 100*log(GDP at constant prices)  2018Q1  2017Q3  2017Q1  2016Q3  2016Q1  2015Q3  2015Q1  2014Q3  2014Q1  2013Q3  2013Q1  2012Q3  2012Q1  2011Q3  2011Q1  2010Q3  2010Q1  2009Q3  2009Q1  2008Q3  2008Q1  1030  Figure 2.