some time been positively assessed by international financial institutions and rating agencies. let me remind you that recently – in march to be precise – moody ’ s raised serbia ’ s credit rating. during the assessment, the agency took into account all of the results achieved in terms of reducing imbalances and achieving macroeconomic stabilisation, as well as the results of implementation of the dinarisation strategy and the resolution of non - performing loans. the risk premium, which since the start of the year has fallen in serbia more than in the neighbouring countries, touching its ten - year low, also reflects the growing confidence in the serbian economy. in addition, the projections of key macroeconomic indicators for serbia prepared by relevant institutions run close to our forecasts. they also assess that inflation will move within the target tolerance band both this and the next year, and expect further acceleration of gdp growth similar to our projections. all the above factors indicate that our economy is now much more capable to respond to challenges – which is an additional incentive to us to preserve the stability we have ensured and to continue with structural reforms and improvements in the investment ambience. you may rest assured that the national bank of serbia will continue to closely monitor and assess the developments and tendencies in the domestic market and the international environment. as so far, we will continue to apply all available instruments in order to maintain low and stable inflation in the medium run, which, combined with the preservation of financial stability, will contribute to economic growth on sustainable grounds. thank you for your attention. i now give the floor to my colleagues.

national bank of serbia governor ’ s opening remarks at the presentation of the inflation report – may 2017 dr jorgovanka tabakovic, governor belgrade, 19 may 2017 ladies and gentlemen, dear colleagues, welcome to the presentation of the may inflation report. as always, we will give an overview of the current monetary and macroeconomic developments and our expectations for this and the following year. inflation within the target tolerance band first, i would like to underline that since the beginning of 2017, inflation has moved within the bounds of the new, lower target tolerance band. we anticipated that inflation would move within the target tolerance band this year and announced this trend at presentations of the inflation report last year as well as at the previous, february presentation. as in other countries, inflation in this period was affected by the recovery in global oil prices in the latter half of 2016 as was expected ; however, adverse weather conditions early this year resulted in a higher than expected increase in the prices of fruit, vegetables and firewood. that this is an impact of one - off factors on inflation is suggested by low and relatively stable core inflation, which hovered at around 2 % year - on - year. according to our latest projection, over the two - year horizon covered by the projection we expect inflation to move within the bounds of the target tolerance band of 3±1. 5 %. you will hear a more detailed elaboration on the projection of inflation and its factors later on in the conference. i would like to take a look at developments in the international environment which for quite a while have posed a challenge to serbia, as well as to all small and open economies, which is why it is important that we preserve macroeconomic stability and improve our business ambience. in the prior period, the international environment was marked by uncertainty – uncertainty regarding the pace of global recovery, uncertainty regarding the character of monetary policies of the leading central banks and uncertainty in terms of movements in the prices of primary commodities, notably oil. the uncertainty in the international financial market originates primarily from the diverging monetary policies pursued by the fed and the european central bank. taking stock of the us economy, the fed continued to raise its fed funds rate in 2017. by contrast, the european central bank ’ s decision to extend the quantitative easing programme at least until the end of 2017 will mitigate the negative effects of the fed ’ s monetary policy normalisation. these decisions affect not only their economies, but also global markets and capital flows to emerging