, amounting to 3. 7 % of gdp the budget deficit was almost halved last year, while the current account deficit was cut by one fifth and was fully covered by foreign direct investment. in addition, the public often debates whether the noticeable fall in bank lending rates and the cost of government borrowing is attributable more to the monetary easing of the national bank of serbia or the european central bank. i will give you nothing but facts. the fall in dinar lending rates began in september 2013, after the national bank of serbia initiated a cycle of key policy rate cuts in may that is also their lowest level on record. and these are the facts. lower interest rates also reflect competition among banks which increased, inter alia, as the national bank of serbia made sure that citizens have access to transparent information on lending terms offered by different banks. during the same period, though lesser than that for dinar loans, a decline was recorded for interest rates on euro loans ( by 2. 8 pp, to 4. 4 % in december ), which is by all means due to the european central bank ’ s monetary accommodation and the consequent fall in euribor. there is no doubt however that this is also a result of serbia ’ s better macroeconomic performances and lower risk premium, and hence lower cost of borrowing for both government and private sector. bis central bankers ’ speeches after cutting the key policy rate in its february meeting, the executive board particularly underlined the expectation that further monetary policy easing will be followed by a further recovery of lending activity, which will contribute to investment. the 1. 8 % credit growth in 2015, in the face of maturing of rsd 110 bln worth of subsidized loans, was beyond our expectations. new investment loans were 2. 5 times higher than in 2014, while a significant rise was recorded also for loans that were refinanced under much more favourable terms. we expect positive tendencies in the credit market to continue in 2016. ladies and gentlemen, dear guests, what is certain, despite numerous uncertainties in the international environment, is that we will maintain monetary and financial stability and thus, give a full contribution to sustainable economic recovery and prosperity of our country. i now give the floor to ana ivkovid to present the key messages from the february inflation report. bis central bankers ’ speeches

business and investment environment in serbia is favourable is evidenced also by the continuing high inflow of foreign direct investment, which this year again will more than suffice to cover the current account deficit. i am particularly pleased to be able to say today that as of recent there are housing loans in dinars in the serbian market, offered at the interest rate of below 5 % and a repayment term of up to 30 years. this means that there is confidence that the stable macroeconomic environment will be maintained over the long - term horizon. the key message i would like to leave with you today is that inflation in serbia is low and stable and that it will remain so in the period ahead. let me remind you once again that, as of 2017, the inflation target will be one percentage point lower than the target since end - 2012. this shows that convergence to the eu in the financial sector has already been fully achieved. thank you for your attention. i will now give the floor to my colleagues who will give a presentation of the key messages from the inflation report.