? we would have witnessed unemployment, factory closures, billions of euros of gdp lost. had we not responded immediately and comprehensively, we estimate that gdp would have fallen by over 6 % in 2020, while the recovery, as was the case after the earlier, 2009 crisis, would last three to five years. due to the global deterioration of the epidemiological situation by the end of last year, we extended our support through the economic package of measures this year as well. having in mind everything we did, including the latest extensive measures by the government, serbia will recover from the consequences of the pandemic during this year. we will continue to monitor and assess movements and to send with our actions a clear message to everyone – that serbia ’ s stability is not and will not be threatened, because such stability – political, monetary and financial – is the cornerstone of a better life we are building. dear friends, 1 / 4 bis central bankers'speeches we would not be able to talk today about sustainable development and innovation had we not protected our economy from the consequences of the pandemic with our measures. i am pleased that almost each month the nbs responded with some of its measures. i am not happy that we had to respond, but i am pleased that in the prior period we had created room for such a response and that we responded with the right measures. so what did we do and what have we done? to support economic recovery, in 2020 we cut the key policy rate four times, to the current level of 1. 0 %. through different operations, we supplied liquidity at carefully measured maturity and at a favourable interest rate, acting as the “ first resort ”. we enacted numerous measures to support household, corporate and government sectors to weather this crisis financially, at times when they needed it the most. we thereby propped up the liquidity of all sectors, helped sustain access to funding and ensure even more favourable financial conditions, with interest rates on new dinar corporate loans reduced by additional 0. 8 pp in 2020. thanks to the mix of all the adopted measures, last year interest rates on dinar and euro - indexed corporate loans almost equalised, and this is something we have never seen in serbia before. moreover, in january this year the interest rate on dinar corporate loans of 2. 2 % was at a significantly lower level than the interest rate on euro loans which measured 2. 8 %. as a result of all the measures we have adopted,

individuals and companies to make sound, long - term economic decisions. if you recall the 1970s and early 1980s, when inflation was not contained – when it was both high and variable – you'll remember the high degree of uncertainty that prevailed then. prices were hard to compare and hard to predict. as a result of this uncertainty, people found it difficult to make sound spending and investment decisions. investors wouldn't commit resources for long periods of time ; labour negotiations were acrimonious ; and the overall economy was not as productive as it could have been. happily, this experience can now be relegated to the " bad old days. " so that's one advantage of inflation control – greater certainty about the future value of money. second, when inflation is contained, and monetary policy is set to keep the economy running close to capacity, we can deal more effectively with economic shocks. resources can more easily be reallocated from sectors where demand is relatively weak to sectors where demand is relatively strong. this is especially important during periods when there are large movements in relative prices – that is, in the prices of some goods and services relative to other prices – such as we've seen in recent years. over the past five years, energy and non - energy commodity prices have gone up a good deal in comparison with those of non - commodity manufactured goods, and the exchange rate has changed considerably, further affecting the prices of many goods. yet overall, the economy has adjusted well against the backdrop of low, stable inflation. to summarize : keeping inflation low and stable gives people confidence – confidence in the future value of their money, confidence in their financial decisions, and confidence in the ability of the economy to withstand shocks and grow in a sustainable fashion. since 1991, to help us keep inflation low and stable, the bank of canada and the government of canada have had an explicit inflation target. and since 1995, the target has been the 2 per cent midpoint of a 1 to 3 per cent range. the inflation target helps to anchor people's expectations of inflation, and that in itself helps to keep inflation low and the economy relatively stable. the target also helps us in our deliberations and decision making at the bank of canada. i should also mention that the inflation target has another important benefit – it makes us more accountable for our actions. how does the target guide our decision making at the bank? well, if the economy is moving above the limits of its capacity, so that the