but price stability is yet to be achieved. ten years of experience with inflation targeting has shown that the fight against inflation requires collaboration from all relevant parties. we believe that government income and wage policies as well as structural issues related to food prices are important components in this endeavor. moreover, macroprudential policies towards prudential borrowing also facilitate the fight against inflation by supporting a balanced growth. thus, bringing inflation permanently down to the 5 - percent target requires all institutions to continue resolutely with the efforts made in recent years. according to the gdp data of the third quarter of 2015, economic activity proved more robust compared to the outlook presented in the october inflation report, and the gdp grew steadily by 1. 3 and 4 percent on quarterly and annual bases, respectively ( chart 15 ). on the spending front, final domestic demand increased modestly in the third quarter, while external demand contributed positively to the gdp after three quarters ( chart 16 ). bis central bankers ’ speeches chart 15. gdp and final domestic demand chart 16. ( real, seasonally adjusted, billion tl ) contribution of demand components to year - on - year gdp growth ( percentage points ) source : turkstat. source : turkstat. the demand outlook for 2016 leads to expectations of stronger economic activity compared to 2015. amid waning domestic uncertainties, rising consumer and investor confidence may boost domestic demand. revival of investments, at least partially, in 2016 that were delayed in 2015 due to domestic uncertainties and the effect of the strong post - crisis employment performance coupled with the recent wage developments on the income channel are likely to support domestic demand. moreover, the projected fall in the current account deficit and the strong public finances also provide room for policy responses against possible shocks. the rebound in the eu economy continues to support our exports, while the uncertainties related to the middle east and russia constitute downside risks ( chart 17 ). moreover, volatility in global financial markets and concerns over global growth may deteriorate financial conditions and foreign demand. in sum, we expect that in 2016, domestic demand will prove slightly stronger than 2015, while foreign demand will, despite the existence of geopolitical risks, recover owing to the recovery in the eu. accordingly, we project that maintained macroprudential measures coupled with favorable developments in the terms of trade will support the ongoing improvement in the current account deficit ( chart 18 ). chart 17. chart 18. ( real, seasonally adjusted, 3 - month average 2010

##zing prices, promoting economic growth, expanding employment and maintaining the balance of payments in an equilibrium. the first is to maintain reasonable growth in money, credit, and aggregate financing to the real economy ( afre ). the pboc will use a mix of monetary policy tools to keep liquidity adequate at a reasonable level, and guide financial institutions to enhance the stability and sustainability of credit growth. in accordance with the requirements of the central financial work conference, we will take the initiative to activate financial resources that are inefficiently occupied and improve the efficiency of capital utilization. up to now, outstanding loans in china's banking system have exceeded rmb200 trillion, and outstanding afre has exceeded rmb300 trillion. in the past few years, the annual increase in loans has registered about rmb20 trillion, and the afre has increased by over rmb30 trillion. activating existing loans, improving the efficiency of their utilization, and optimizing the issuance of new loans are equally important to supporting economic growth. 2 / 6 bis - central bankers'speeches the second is to continuously intensify support for major strategies, key areas and weak links. we will make good use of central bank lending to support rural development and msbs, central bank discounts, and inclusive msb loan facilities. moreover, we will continue to implement the carbon emission reduction facility, special central bank lending for supporting the technological progress of enterprises, and special central bank lending for inclusive elderly care, etc. we will also support the sound development of sci - tech innovation, private enterprises and msbs, advanced manufacturing, green development, and inclusive elderly care, and make significant efforts in the areas of technology finance, green finance, inclusive finance, pension finance, and digital finance. the third is to keep the interest rate at a proper level to steadily bring down the financing costs for the real economy. last year witnessed a rapid rate hike by the federal reserve ( fed ), but china has been implementing a monetary policy that focuses on domestic conditions, bringing down policy rate steadily. the pboc will continue to conduct interest rate management in a proper manner while giving priority to china's own economic goals. we will guide and adjust the macro interest rate according to the rules of market economy and the needs of counter - cyclical macro adjustments, aiming to keep the interest rate in line with the requirements for achieving potential economic growth. the fourth is to keep the rmb exchange rate basically stable at an