of gdp ) source : ministry оf finance. * central government. eur chf other furthermore, owing to the effects of past monetary policy easing, a reduced country risk premium, low interest rates in the international money market and higher interbank competition, the conditions of private sector financing were even more favourable in the fourth quarter. our decisions translated fully into the credit market and in late 2019 interest rates on dinar loans were cut to the hitherto lowest levels : 4. 0 % in the corporate and 9. 1 % in the household sector. in regard to euroindexed loans, financing conditions improved not only thanks to low interest rates in the european money market, but primarily owing to the sharp fall in the country risk premium, driven chiefly by the positive impact of domestic factors. chart 11 interest rates on new dinar loans ( weighted average values, p. a., in % ) chart 12 interest rates in the primary market of dinar government securities and eurobonds ( p. a., in % ) dinar securities, 5y dinar securities, 7y dinar securities, 10y eurobonds, usd, 5y eurobonds, usd, 7y eurobonds, usd, 10y eurobonds, eur, 10y household loans * corporate loans * key policy rate source : nbs. source : ministry of finance. * excluding revolving loans, current account overdrafts and credit card debt. the loan structure is such that lending activity also gives a full contribution to economic growth, owing principally to stepped - up investment borrowing by enterprises. since mid - 2019, investment loans constituted the bulk of corporate loans. the loan structure by enterprise size is also favourable given that a major portion is channelled to micro -, small - and medium - sized enterprises. the room for further credit growth was also created by a further reduction in the npl share in total loans, to the new lowest level of 4. 1 %. chart 14 contributions to y - o - y corporate lending growth chart 13 npl share in total loans, gross principle ( in pp, excluding the exchange rate effect ) ( in rsd bn ) ( in % ) 19. 0 18. 6 16. 9 import other investment export liquidity and current assets transaction accounts y - o - y lending growth rate, in % 11. 3 9. 9 17. 0 15. 7 21. 4 21. 5 21. 6 5. 7 4. 1 2008

tolerance band. it is a fact that by placing inflation under control we have restored confidence in the monetary policy, which now makes it easier for us to achieve results. anchored inflation expectations enhance the efficiency of monetary policy and, by extension, the economy ’ s resilience to external shocks. in our february projection as well, inflation will remain stable in the coming period and will approach the target midpoint gradually, though it will most probably stay slightly below the midpoint until the end of the projection horizon. chart 1 inflation movements and inflation expectations of the financial sector chart 2 inflation projection ( y - o - y rates, in % ) ( y - o - y rates, in % ) 6y average inflation = 1. 9 % 6y average core inflation = 1. 7 % 2. 0 1. 9 1. 1 - 1 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 cpi core inflation * sources : sors, nbs calculation and bloomberg. * cpi excluding food, energy, alcohol and cigarettes. inflation expectations 12 3 12 3 12 3 12 3 - 2 source : nbs. acceleration of economic growth in serbia is led by investment, exports and sustainable consumption. the economic growth in 2019 exceeded our initial projections, which we revised upwards in the course of the year. according to our latest estimate, it amounted to 4. 2 %. economic growth accelerated significantly in h2, reaching, in our estimate, 6. 1 % y - o - y in the last quarter. in the past half - decade, serbia has been characterised precisely by the growth led by investments. their impact on economic activity is unambiguously evidenced by the data on fixed investment growth at an average annual rate of around 10 % during this period, whereby their share in gdp increased to around 24 %. let me reiterate that fixed investments increased cumulatively in the past two years by close to 35 %, accounting for three quarters of serbia ’ s economic growth. an increase in their share to around 24. 5 % of gdp is expected this year as well, guided by continued implementation of infrastructure projects and private sector investment. chart 3 imf gdp growth projection for 2019 chart 7 fdi structure by sector ( in % ) ( in % ) april 2018 otober 2018 april 2019 october 2019 actual 2005 – 2008. euro area 2009 – 2012. serbia sources : imf and nbs estimate. source : nbs. 2018 – 2019. 2013 – 2017. construction and real estate finance