- y on average. since the start of the year, the growth has been led by corporate investment loans and household housing loans, meaning that the loan structure is favourable in terms of support to sustainable economic growth. not less importantly, for the first time since the pandemic broke out, the results of the bank lending survey show that in q1 this year banks eased their credit standards and are expected to continue doing so in the coming period. the npl share in total loans is still below the pre - crisis level. it measured 3. 9 % in march. for instance, a year after the effects of the global financial crisis materialised in our country ( september 2008 ), the npl ratio soared above 17 %, reflecting the economic contraction and dinar ’ s weakening against the euro. this attests to the importance of adopted monetary and fiscal stimuli in the pandemic - induced crisis, and relative stability of the exchange rate, as this helped preserve financial stability and supported further strong interaction between the real and financial sectors. the focus of monetary policy makers will stay on ensuring price and financial stability, while supporting as fast growth of our economy and employment as possible, further growth of the export sector, and ensuring a favourable investment environment. the nbs will continue to watch closely the movement and impact of key factors from the domestic and international environment on inflation, financial stability and the pace of economic recovery, and will accordingly adjust its measures, acting in the best interest of our businesses and households. ladies and gentlemen, dear colleagues, the global economy is gradually recovering from the pandemic - induced crisis and, as assessed by international financial institutions, its growth outlook is more favourable than three months ago. first of all, positive effects are expected from mass vaccination and additional fiscal stimuli of the largest world economies, primarily the us. the uncertainty as to the course of the pandemic and its effect on the global economy and, thereby, on prices of primary commodities and global financial conditions, has subsided compared to the earlier period. we are beginning to see the light at the end of the tunnel. the normalisation of global economic flows and expected recovery of external demand, a well - timed and adequate response of economic policy makers in serbia and, as a result, the preserved favourable financing conditions, production capacities and jobs, including further advances in vaccination, are estimated to prop up the gdp growth rate to 6 % and more and to ensure a return to dynamic growth rates in the

5 % in october. relative to the peak from march last year, inflation was set on a downward path by all of its key components, most of all food prices, whose y - o - y growth since february this year has been constantly lower than headline inflation. core inflation also recorded a sharp fall in the same period, coming down from more than 11 % in march last year to less than half that number, and trending at around 5 % y - o - y over the past months. the level of inflation in the previous months was in line with the projection from the august report, as well as with our projection from a year ago, which you can read about in more detail in one of the text boxes in the november report. due to the negative effects of the drought, the october inflation outturn was slightly higher than anticipated. chart 1 november 2023 inflation projection and its outcome chart 2 headline, core and trimmed mean inflation ( y - o - y rates, in % ) ( y - o - y rates, in % ) consumer prices core inflation trimmed mean ( 15 % ) targeted inflation target tolerance band 10. 2 7. 6 5. 0 3. 8 4. 2 - 2 3 6 source : nbs. 3 6 3 6 3 6 sources : sors and nbs calculation. according to our new central projection, inflation will continue to move within the target tolerance band over the next two years, i. e. over our projection horizon. in the coming period, y - o - y inflation should gradually slow down and approach the target midpoint at the end of next year. the largest contribution to such inflation movements will come from the still restrictive monetary conditions, anchoring of not only medium - term but also of short - term inflation expectations within the target bounds, as well as lower 2 оf 9 imported inflation and the fall of global oil prices, which is expected based on the futures. in addition, we expect real wages to grow in line with productivity, helping core inflation decline and approach the headline rate. relative to the previous projection, the negative effects of the drought on the supply and prices of fruit and vegetables are stronger, and domestic demand has been rising slightly faster. we estimate that this will mostly be offset by a lower global oil price, if it moves in line with the futures, and partly also by subdued imported inflation in the conditions of slower than anticipated recovery in the euro area. taking all this into account, our headline inflation projection for next