to 3. 0 % this and 3. 5 % next year, driven, as so far, by investment and exports ( which posted an exceptionally high growth rate in 2016 ). household consumption is likely to provide an increasing contribution, mostly owing to the recovery in the labour market. as exports significantly outpaced imports in 2016, the trade deficit narrowed by 21 % compared to the year before. reflecting further improvement of the investment ambience, the inflow of foreign direct investment was high and project - diversified – most notably in export - oriented sectors. it came close to eur 1. 9 billion in 2016 and was more than sufficient to cover the current account deficit. furthermore, thanks to all results of macroeconomic stabilisation, an international financial institution issued the first long - term dinar security. namely, in december last year the ebrd issued a three - year dinar bond, which will be traded on the belgrade stock exchange. the dinar proceeds will be on - lent to local enterprises, notably smes. this move underpins the dinarisation process, which remains among our strategic commitments. finally, please remember these figures, they are very simple. we ended last year with year - on - year inflation of 1. 6 %, the fiscal deficit of 1. 4 %, the current account deficit of 4 %, and the npl level of 17 %. we intend to further improve these results which have exceeded the expectations of many. ladies and gentlemen, dear colleagues, thank you for your attention. i will now give the floor to my colleagues.

should focus on issues which are exclusively under our control. pleasant words, “ stunts ” from the past or delaying price increases cannot do the trick, not in the medium run, and even less in the long run. though we in the nbs are satisfied with the core inflation result achieved in the course of the current year despite the untimely elections and the related fiscal expansion, doubling of the price of oil, and the drought, on the eve of 2008 we are more than concerned and put a question to ourselves : should the prevailing tendencies persist, can the nbs reach its objectives with the instruments at its disposal or must there be new ones added? one thing is for sure, to achieve our objectives, we shall use all the instruments at our disposal, both old and new, but that shall not make us popular. that much i can tell in advance. • high exposure to foreign currency risk creates additional risks to the financial sector as confirmed by the developments during last two weeks. if arguments extended by the nbs on the need to borrow in dinars do not seem plausible enough, i sincerely hope that recent developments in the market shall force many to reconsider which currency they should borrow in, namely, how to minimize their exposure to the foreign currency risk. the role of banks is of the highest importance in terms of warning against foreign currency risk exposure, if not for the sake of their clients than for the sake of their own balance sheet results! • in the absence of adequate market competition, price signals are transferred slowly and inaccurately. this is most evident in the case of prolonged and high appreciation of the dinar which is transferred to retail prices with a significant delay. world practice points to the rigidity of prices, but it seems that they are practically “ cemented ” in serbia today. i sincerely hope that something shall be done in that respect, and done exclusively for economic reasons. all in all, from the macroeconomic point of view, both internal and external challenges require that banks, unless they have already done so, reassess which way and how to proceed. in his biography, alan greenspan says that market produces constant stress as in order for someone to gain, someone else has to lose. i fear that many are not yet aware that the market is not a guarantee, but a chance to make money! and finally, allow me to go back to where i started from. strong and stable banking sector, primarily in terms of high quality and reliable ownership structure,