Of course, last year the fall in the oil prices was also beneficial for the trade balance. On the financing side, the financial flows were large enough to cover the current account deficit and to provide additional reserve accumulation. It is important to note that FDI inflows continued to flow in the economy, with their ratio to GDP being kept stable at 3.3% of GDP. Yet, the largest part of the financing flows came through the government borrowing at the international market, at rather favorable terms, pinpointing the perception of the investors for sound fundamentals and rather prudent policies in the Macedonian economy. Observing the inflation path, it more or less resembled the inflation pattern elsewhere, with the falling food and energy prices pushing prices down. The average headline rate for 2014 was mildly negative (–0.3%), while the core inflation albeit slowing down, on average remained positive. The inflation adjustment is perceived as temporary, driven by supply-side factors, and without any risks to become entrenched in the inflation expectations and to jeopardize the  BIS central bankers’ speeches  1  economic recovery. The fact that the negative output gap has been narrowing and the fall of the prices has been significantly slowing down in the first months of this year, just support the former notion. Domestic financing through the banking sector significantly increased in 2014, with credit market recovering much faster compared to the previous years.
NATSAVE was set up to administer savings and to provide credit facilities in urban, periurban and rural areas to individuals and small business enterprises. Its business strategy is to target the low and medium income earners through the establishment of a sustainable network of outlets and by offering sustainable financial services. The Bank has continued to be a leading public vehicle in ensuring financial inclusion to all citizens across the country through the vast branch network. Currently, NATSAVE has 27 branches (including Lukulu branch), spread across the country. 4. Honourable Ministers and Distinguished invited guests, a key element in the strategy of poverty reduction is the provision of financial services to the majority of our people, the small and micro enterprises who have traditionally been neglected by the formal banking sector. NATSAVE’s expansion program therefore has the potential to improve access to financial services and enhance competition in the financial sector. This improves financial services delivery to the Zambian people and brings more of the financially excluded population to the financial institutions. The Bank of Zambia views this development positively, particularly as recent trends indicate that many institutions in the financial sector are extending their branch networks. 5. However, it is important for financial service providers to complement branch expansion with increased product innovation. The ability to offer a broad range of products and services is the hallmark of financial sector deepening, as different types of products appeal to a wider range of clients, leading to enhanced access to financial services.