growth in the medium term, determining the future prospects of the economy? domestic factors are also very important. sound macroeconomic policies in the pre - crisis period prevented major imbalances in the economy and left room for conducting countercyclical policies in the wake of the crisis relieving its effects ( which was not the case with the other countries in the region ). more intensive implementation of structural reforms, in particular, improving the business climate, also played a very important role, whose positive effects have become especially prominent in recent years. thus, despite the weak growth in foreign demand, our economy has grown by solid rates. the external environment is still not sufficiently stimulating. foreign effective demand has not yet offset the sharp decline of nearly 5 %, registered in 2009, although it shows signs of recovery, which gradually reduces its importance as a limiting factor for the growth of the domestic economy. it is estimated that it will continue to gradually recover, moving around 2 % in 2016. however, the key factors that ensure solid economic performance, with economic growth of 2. 7 % in 2013 and 3. 9 % in the first three quarters of 2014, are factors that are specific to macedonia, i. e. they are of inner character. one of the key factors that cause “ decoupling ” of the speed and intensity of the recovery of the macedonian economy and foreign effective demand, and increase the resilience of the economy to external shocks is the presence of new companies – foreign investments ( mainly in the tradables sector ), which gradually and steadily increase bis central bankers ’ speeches the capacity utilization and diversify the production and export structure of the economy. since 2010, their activity has grown steadily, with the current exports of these facilities accounting for around 35 % of total exports. however, more importantly, their net value added is constantly increasing and thus relieves the trade deficit of the economy. since 2010, the cumulative positive effect of these companies on the trade balance is about euro 200 million, or 2. 6 % of gdp. this reduces the external vulnerability and improves the risk profile of the country and its foundations. the raised technological level, the increase in manpower, the improved access to capital, the spillover effects on domestic companies ( which is already visible in our country ), the absorption of the workforce, are also significant favorable effects. in the medium term more positive effects should be expected. the second key factor that significantly contributes to achieving solid rates of economic growth is the fiscal stimulus

t expect that these tools will prove necessary, it is nice to have them available should we need to deal with unanticipated contingencies. how will financial markets react to the onset of normalization? my own view is that there likely will be some turbulence. after all, lift - off will represent a regime change after more than six years at the zero lower bound. recognizing this, we have a responsibility to minimize the amount of potential turbulence by communicating clearly in order to reduce uncertainty about conditions surrounding lift - off and the likely aftermath of lift - off. this means being clear about what factors are important in driving the timing of lift - off. however, this does not mean providing advance notice about precisely when lift - off will occur because the timing should depend on the incoming economic news and how this influences the economic outlook. instead, if you pay attention to the incoming economic news and listen to our assessment about how the outlook is evolving, then i think you will be able to judge for yourself when liftoff is likely. what also matters for financial asset prices is the likely post - lift - off trajectory of short - term rates over the medium - to longer - term. in fact, this should be more important than the particular month in which the normalization process starts. on this score, i think it is hard to be precise about the expected path of short - term rates. that is because it depends on two important factors : ( 1 ) how the economic outlook evolves, which depends, in part, on how loose or tight monetary policy actually is at a given level of short - term rates, and ( 2 ) how financial conditions broadly react to changes in the level of short - term rates. my own view is that the upward trajectory of short - term rates is likely to be relatively shallow. this reflects several factors. first, the lack of strong forward momentum in the economy despite the low level of short - term interest rates suggests that u. s. monetary policy is not as accommodative as one might think. in particular, the lack of strong momentum suggests that the real equilibrium federal funds rate today is considerably lower than the 2 percent rate assumed in the standard taylor rule formulation. work done by my federal reserve colleagues, thomas laubach and john williams, suggests that the so - called neutral real bis central bankers ’ speeches federal funds rate today may be close to zero. 4 this presumably reflects still - persistent headwinds from the financial crisis, such as the