radovan jelasic : 125th anniversary of the enactment of the first law on the national bank of serbia speech by mr radovan jelasic, governor of the national bank of serbia, on the 125th anniversary of the enactment of the first law on the national bank of serbia, belgrade, 31 january 2008. * * * ladies and gentlemen, institutional anniversaries such as the one today are the right time to look back at what has been achieved and to ask ourselves if we have managed to preserve the fundamental values of our society and state. today, we are celebrating 125th anniversary of enactment of the first law on the national bank of serbia, which laid the cornerstone of one of the most important institutions of the serbian state. preparations for the enactment of this law lasted for about a decade, as can be seen from a document dating from as far back as 1873. the leading people of that time understood the need for the young serbian state to pursue the most advanced european standards and visited almost a half of european countries, including germany, switzerland and belgium, to learn more about modern central bank organization and operations and to apply this knowledge in formulating the law on the central bank. at that time, there was no brussels administration and serbia was offered no technical or any other assistance, but the makers of the first law on the national bank of the kingdom of serbia had a clear vision of the country ’ s future and of what needed to be done for serbia to catch up and keep pace with the best european practice. anniversaries are also an occasion to remind ourselves of the fundamental ideas, aims and visions, and to see how close we are to achieving them! for the national bank of serbia, entering the 21st century meant a return to the main ideals and spirit of the law enacted in 1883 – to build an independent and professional institution, which is just and fair in the distribution of money. it is misleading to portray serbia as being on a crossroads between the east and the west, dithering between european integrations or their opposite. europe has both an “ east ” and a “ west ”, a “ north ” and a “ south ” – in this europe, we all are equal but different! in practice, such “ europe ”, the europe woven into the law of 125 years ago, means simply that we must work harder, better and more responsibly ; that we must renounce daily populism, sycophantism and pol

##richt criterion of 60 % of gdp and enter a downward trajectory already next year, as assessed by both domestic and international financial institutions. geographically diversified and channelled to export - oriented sectors, investment continues to support the narrowing of external imbalances. owing to the preservation of the existing and opening of new export capacities in manufacturing and agriculture, serbia readily faced the recovery of external demand. it recorded a rise in goods exports of as much as 16. 6 % y - o - y in q1 and a first current account surplus. according to preliminary data, in q1 2021 the current account surplus amounted to close to eur 160 mn, which is a better result by as much as eur 1. 1 bn compared to q1 2020. owing to a gross fdi inflow worth eur 960 mn in q1, and a net portfolio investment inflow of a similar size, the country ’ s fx reserves increased to eur 14. 3 bn, further strengthening the resilience to external risks. according to our estimate, a continued vigorous fdi inflow and government investment growth to close to 7 % of gdp will push up the share of total fixed investment in real gdp to over 24 % already this year. such rise in fixed investment is an important confirmation that the measures we adopted during the pandemic were adequate, well - timed and effective. given the increasing attractiveness of serbia as an investment destination and the government ’ s ambitious plan concerning the construction of infrastructure, in our estimate it is quite realistic that the share of fixed investment will reach 25 % in the next several years. furthermore, continued investment will lead to a further rise in the share of goods and services exports in gdp, which should go up from last year ’ s 48 % to over 56 % by 2023. as a result of past monetary policy easing, borrowing conditions in the domestic market have remained favourable and lending continued up. in the period from the previous inflation report, the key policy rate has been kept at 1 %, which is its lowest level in the inflation targeting regime. financial conditions in the domestic market have remained stimulating and, owing to the effects of past monetary policy easing and the approval of loans under the guarantee scheme at favourable terms, interest rates on dinar corporate loans came close to rates on euro loans. this resulted in stepped - up use of dinar loans and further progress in dinarisation. in q1, corporate and household lending grew by 8. 7 % y - o