3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 10 core inflation including food food prices within core inflation core inflation excluding food consumer price inflation core inflation including food core inflation excluding food processed food prices grew at a slower rate compared to the quarter before, primarily on account of a decline in prices of primary agricultural products. conversely, market - determined non - food product prices grew faster than in q2, prompted by several larger seasonal price increases, rather than reflecting a general tendency in movement of these prices. chart 15 core inflation by component ( monthly growth, in % ) chart 16 contribution to y - o - y inflation ( in p. p. ) 14, 1 11, 2 13, 4 12, 7 12, 1 10, 3 10, 5 9, 3 0. 4 0. 2 - 0. 1 - 1 8, 7 4, 1 - 2 8, 9 9, 6 14, 7 12, 6 1, 9 2, 4 0, 6 - 0, 3 - 2 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 10 food prices within core inflation core inflation excluding food core inflation including food 10 11 fruits and vegetables food prices within core inflation core inflation excluding food administered prices petroleum products cpi contrary to the first half of the year, administered prices grew modestly in the third quarter. the only significant increase was recorded for landline telephony services. the overall increase in the year to september however came at 9. 5 %, extending beyond the 7±2 % framework planned for the whole of 2011. according to last week ’ s data, consumer prices rose in october by 0. 4 % month - on - month or 8. 7 % year - on - year, which shows continuation of a downward trend in inflation. we expect year - on - year inflation to decline further and to return within the target band in the first quarter of 2012. disinflationary pressures stemming from low aggregate demand will be strong in the coming period reflecting lower growth expectations for serbia. the lowering fruit and vegetable prices over the previous two quarters will be factored into year - on - year inflation rates until the next season. however, being currently at a low level, these prices could rise faster next year than other prices, even if the 2012 agricultural season turns average. bis central bankers ’ speeches given the developments on the global markets and the lowering

##iticizing ; that we must think over the long run only, however impossible it may sound today ; and that we must tell the public exactly what awaits us on our road back to europe, however difficult it is, and what the consequences would be of serbia ’ s decision to take a different course. by incorporating the best european practice into the law on the national bank 125 years ago, the creators of the law wanted to bring europe into serbia and to change – or, in modern terms – harmonize our legislation with the european one. serbia, now as then, can only be changed by collective effort of us all, of both you and me! and it has always been difficult to garner majority support for reform efforts – both 125 days ago and today. still, all who are present here today have not only the possibility but indeed a binding obligation to improve our society, quickly and efficiently, and there is no excuse for failing to do so. for, in the national bank of serbia, i am not only supervised by auditors, the council and the parliament, but also by the makers of this law. i feel their spirit in the halls of this building and every day they ask the same question : “ and what did you, radovan jelasic, do today? ” this question is not always easy to answer, but after 7 years in the national bank it is my daily obligation, and i am deeply convinced that you feel the same way. the fact that we knew that reverting to the key principles of the law drafted 125 years ago would not be smooth sailing did not help us much in facing day - to - day challenges. what i wish to say is simple – although we were aware of the job ahead of us, we embarked upon it, and there was absolutely no excuse for not doing so! curiously enough, except in the initial phase of implementing reforms when the people are still buoyant with enthusiasm, you will hardly ever enjoy the support of the majority, unless you take up the trouble of going into great lengths explaining yourself, elaborating on your actions and backing them with good arguments. implementing changes is not easy, and the very paradox of transition is that the process should be stepped up at the time of greatest difficulty, because if you stop even for a second, everything will be lost. i should not be the one to speak about the national bank of serbia ’ s performance over these 125 years and its achievements in the 21st century ; you