national bank of serbia introductory speech inflation report – february 2022 dr jorgovanka tabakovic, governor belgrade, 18 february 2022 ladies and gentlemen, esteemed members of the press, dear colleagues, welcome to the presentation of the february inflation report. we will give you an overview of recent economic trends, our new macroeconomic projections, as well as monetary policy decisions made in the period since the previous report. since our last meeting in november, the global economy has been marked by geopolitical tensions, deepening energy crisis and further growth in cost - push pressures on a global scale. in addition, we are faced with persisting problems in global supply chains and the spread of the omicron variant, to which the leading world economies reacted differently. all of this has led to additional mismatches between demand and supply and to new inflationary pressures globally. energy and food prices recorded a sharp rise worldwide. unlike in the previous crises, besides oil prices, the prices of gas and electricity also recorded robust growth in international commodity exchanges. global strengthening of cost - push pressures and the spread of the omicron variant in our key foreign trade partners led not only to the upward revision of inflation projections, but also to a slowdown in economic activity and a downward revision of gdp growth projections. despite unfavourable circumstances in the international environment, the nbs kept its november projection of real gdp growth for this and the following years. in 2022, as well as in the medium run, gdp growth is expected at 4. 0 – 5. 0 % range, with the central projection in all years measuring 4. 5 %. overall risks to the projection are judged to be symmetric and, as so far, those from the international environment being tilted to the downside and those from the domestic environment to the upside, including primarily government investment and better results in attracting fdi inflows. besides, it will be easier to achieve the 2022 projection as we are building on excellent trends from the last quarter of the previous year, in which, despite the slowdown in the euro area, serbia recorded real gdp growth of 6. 9 % y - o - y or 1. 6 % s - a relative to q3 2021. this was largely a result of the record level of government investments, but also fdis, whose inflow in 2021 reached eur 3. 9 bn and thus surpassed the record high from pre - pandemic 2019. over the past few weeks

domestic and international environment, which will determine our future decisions and moves. you can rest assured that the serbian government and the nbs will conduct a consistent and responsible economic policy, doing everything in their power to see our economy grow even stronger and more resilient to future challenges from the international environment. medium - term price and financial stability remain the nbs ’ s priority, because that is the best way for the central bank to contribute to sustainable economic growth and to a rise in employment and living standards. i will now give the floor to my colleagues from the economic research and statistics department, to give you a detailed account of our new projections.