many countries reached levels unprecedented in recent decades. thus, euro area inflation rose to 7. 5 % in april, which is its record since the bloc ’ s establishment in 1999, and in a number of central and southeast european countries it reached two ‐ digit levels. considering that in the majority of countries inflation continues to rise beyond expectations, inflation projections for the coming period are also being substantially revised up and, accordingly, central banks in these countries are carrying on with monetary policy tightening. under the impact of international movements, inflation in serbia also remained on the upward path and stood at 9. 6 % y ‐ o ‐ y in april. a fresh hike in the global prices of energy, food and raw materials chart 4 policy rates across selected countries chart 3 inflation and target in selected countries in april ( p. a., in % ) ( p. a., in % ) sources : eurostat and central banks of selected countries. * march 2022. usa uk poland romania euro area czech republic hungary turkey ( rhs ) russia ukraine czech republic poland romania bosnia and herzegovina serbia montenegro hungary euro area united states albania inflation target target tolerance band 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 sources : central banks of selected countries. pushed up import prices and stepped up cost ‐ push pressures on domestic producer prices. against such backdrop, we also witnessed growth of core inflation ( cpi excluding the prices of food, energy, alcohol and cigarettes ), which is the most affected by monetary policy measures. nonetheless, we maintained the relative stability of the exchange rate, which together with medium ‐ term inflation expectations of the financial and corporate sectors that have been anchored within the target tolerance band acted as a strong brake that kept core inflation lower than headline. in addition, according to our estimates, domestic demand and labour market conditions still do not generate stronger inflationary pressures. core inflation in serbia is lower than in the majority of countries in the region pursuing the same monetary policy regime, which is the reason why our tightening of monetary conditions in the prior period was more moderate than theirs. chart 5 cpi movements in selected cesee countries ( y - o - y rates, in % ) 13. 8 14. 2 12. 8 12. 4 10. 3 9. 6 8. 3 7. 7 5. 5 romania 1 3 9 11 1 3 1 3 2022 2021 inflation hungary czech republic 9 11 1 3 1 3 2022 2021 core inflation 9 11 1 3 1 3 2022 2021 inflation target poland 9

. 5 21. 6 19. 0 18. 6 15. 7 16. 9 17. 0 11. 3 9. 8 6. 4 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 sept other sectors corporate sector household sector npl share in total loans ( rhs ) source : nbs. total capital ratio tier 1 to rwa sept cet1 ratio source : nbs. ladies and gentlemen, dear colleagues, with low and stable inflation, relative exchange rate stability, favourable financing conditions and maintained financial stability, we have contributed to keeping the economic environment stable and conducive to doing business. by implementing consistent monetary policy and coordinating it successfully with fiscal policy, together with the government we have achieved the results which additionally inspire market participants ’ confidence in economic policy makers and make growth sustainable in the years to come. positive economic outlook for serbia was recognised by a great number of investors that are increasingly deciding to make long - term investments in our country. owing to this, net fdi inflow, as in the previous three years, will be more than sufficient to fully cover the current account deficit – in the first nine months of the year this coverage was over 122 %. in the medium term, the activity of domestic and foreign investors will result in capacity building, primarily in tradeable sectors, and will thus underpin growth acceleration in the longer term. thanks to excellent results of fiscal consolidation in the past several years, investment growth is now increasingly supported by the government too. the achieved fiscal balance and the reduction in the share of the central government public debt to a sustainable level ( 55. 9 % of gdp in september ) contribute to favourable prospects for a further credit rating upgrade and to lower country risk premium, making external finance more accessible and cheaper. the pick - up in economic growth and improvement in the standards of living are a proof that we have worked to the benefit of all, strengthening the economy ’ s resilience to external shocks and taking great care that the solutions implemented are sustainable in the long run. the nbs will continue to closely monitor and analyse the international markets and to assess their impact on economic developments in serbia. looking ahead, price and financial stability, as well as continued support to the economic policy of the government, remain our priorities. we believe that by contributing to favourable business conditions and hence competitiveness of the overall economy, we have proved that we are a reliable partner to everyone doing business in serbia and will continue to be so in the future. thank