, declines in fertility rates and increases in longevity may lead to similar issues with aging populations in what is currently the developing world but likely only well after the demographic transition in the united states and other developed nations. * * * the aging of the population in the united states will significantly affect our fiscal situation. most observers expect social security, under existing law, to be in chronic deficit over the long haul ; however, the program is largely defined benefit, and so the scale of the necessary adjustments is limited. the shortfalls in the medicare program, however, will almost surely be much larger and much more difficult to eliminate. medicare faces financial pressure not only from the changing composition of the population but also from continually increased per recipient demand for medical services. the combination of rapidly advancing medical technologies and our current system of subsidized third - party payments suggests continued rapid growth in demand, though future medicare costs are admittedly very difficult to forecast. although the sustainability of fiscal initiatives is generally evaluated for convenience in financial terms, sustainability rests, at root, on the level of real resources available to an economy. the resources available to fund the sum of future retirement benefits and the real incomes of the employed will the fertility rate used here is the total fertility rate. it is measured as the average number of children who would be born to a woman over her lifetime if she experienced the birth rates by age observed in any given year. depend, of course, on the growth rate of labor employed plus the growth rate of the productivity of that labor. the growth rate of the u. s. working - age population is expected to decline substantially over the next two decades and to remain low thereafter. but the fraction of that population that is employed will almost surely be affected by changes in the economic returns to working and, especially for older workers, improvements in health. americans are not only living longer but also generally living healthier. rates of disability for those over 65 years of age have been declining even as the average age of the above - 65 population is increasing. this decline in disability rates reflects both improvements in health and changes in technology that accommodate the physical impairments associated with aging. in addition, work is becoming less physically strenuous but more demanding intellectually, continuing a century - long trend toward a more - conceptual and less - physical economic output. for example, in 1900, agricultural and manual laborers composed about three - quarters of the workforce. by 1950, those types of workers accounted for one - half of the workforce

sors and consumer prices ( % ) nbs calculation. 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 source : gallup, ipsos / ninamedia, bloomberg and nbs. * ipsos and gallup agencies until december 2014, ninamedia agency since december 2014, and ipsos agency since january 2018. after reaching this year ’ s low in april, we expect inflation to gradually approach the target in the coming period, though this year it will remain close to the lower bound of the target tolerance band. we expect inflation to approach the 3. 0 % midpoint in the second half of 2019, and to remain stable around that level until the end of the projection horizon. in view of this, we expect inflation to remain low and stable in the coming period as well. in other words, in the medium term, year - on - year inflation will move within the target tolerance band ( 3. 0 % ±1. 5 % ) until the end of the projection horizon, i. e. in the next two years, also owing to a gradual recovery in domestic demand. medium - term inflation expectations of the financial and corporate sectors are also anchored at the target midpoint of the national bank of serbia. * * * monetary policy easing amid low inflationary pressures helps speed up lending and economic activity, which, along with the efforts to resolve non - performing loans, made the share of these loans fall below the pre - crisis level. by carefully monitoring and analysing the developments in the domestic and international environment, we assessed that the expected movement in inflation and its underlying factors going forward, along with the further strengthening of macroeconomic fundamentals, allow for additional monetary policy easing. accordingly, we decided to further cut the key policy rate in both march and april by 25 basis points to 3 %, its lowest level in the inflation targeting regime. its sharp drop in the period since the monetary easing cycle began ( may 2013 ) had a strong impact on the rise in disposable income, thus contributing to a faster recovery of domestic demand. we made the decisions on further monetary policy easing taking into consideration not only that the february medium - term inflation projection was lower than the previous one, both for this and next year, but also that inflationary pressures weakened further after the february projection. on the other hand, monetary policy caution was mandated by pronounced uncertainty in the international commodity market, mainly regarding the movements in oil prices