180  International Liabilities  160 140 120  100 80 60 40  20 0 Region  CEE 2007-2005  2012-2008  SEE Baltics 2015-2013  Source: International Monetary Fund, Balance of Payments Statistics. Data from the balance of payments statistics used as an indicator for the capital inflows in the region point that overall capital flows have continued, but at a much slower pace compared to the pre-crisis period. The slowdown is visible in the most recent period, as well. Thus, during 2013-2015 the capital inflows for the region on average amounted to around 12 % of GDP, compared to a cumulative growth of 38 % of GDP in 2008-2012 and 67 % during 2007-2005. The largest slowdown is observed for the CEE group of countries, where capital inflows almost stalled. Chart 8: Components of capital inflows, cumulative change in p.p.
Thus, in countries like Albania, Croatia, and Macedonia as well, the growth of household’s deposits is tepid. In the first two countries, the average growth rate is around zero in the last four years, while in Macedonia, although the growth rate is positive, a slowdown is observed in 2015 and 2016. In the Macedonian case, a comparison of household’s savings and its fundamentals was conducted, and the analysis revealed that the slowdown cannot be explained by the change in the disposable income, nor by other savings alternatives. Hence, some country-specific factors – political instability, and the drop in the interest rates were detected as possible causes for the slowdown. Chart 6: Annual growth in % 100  Deposits of households  75 50 25 0  average -2005-2007  average -2008-2012  average - 2013-2016  region avg  SLO  SRB  ROM  POL  MKD  LIT  LAT  HUN  EST  CZR  CRO  BUL  BIH  AlB  -25  2016  Source: Central Banks’ internet pages. Apart from the interest rate channel, quantitative easing is another possible spillover channel of ECB policy that so far has not been subject to a wide research. The expected outcome of the ECB assets purchase programs for the region would be allocation of part of the liquidity on the CESEE financial markets, enabling increase of the cross–border capital flows, compression of the longer term yields, of the government in particular and possible increase of the stock market indices.