##alities, which was the basis for the decision adopted by the eu council, in the composition of heads of state or government, in march 2003. although the new voting system – like any rotation system – is characterised by a degree of complexity and was criticised for that reason by the european parliament, in our judgement it will help to ensure that the governing council will maintain its capacity for timely and efficient decision - making in a substantially enlarged euro area. another amendment to the statute of the escb was introduced at the initiative of the ecb, when the ecofin council recommended in october 2002 that the accession treaty provide for an increase, upon accession by new member states, of the ecb's subscribed capital and of the ceiling on the transfers of foreign reserve assets by ncbs. in addition to these statutory changes, the eurosystem is involved in an intense and manifold dialogue, concerning both policy and technical issues, with the central banks of the accession countries to assist them in their preparations for a smooth integration into the escb and the eurosystem. the numerous internal preparations within the escb are guided by an accession master plan, which comprehensively reviews the ecb's functions and infrastructures so as to ensure that all relevant issues are dealt with in a timely and effective manner. 2. economic and monetary developments the review of economic and monetary developments in 2002 clearly reveals that the environment in which monetary policy was conducted in 2002 was one of considerable uncertainty. in particular, signals regarding medium - term inflation prospects and risks were at times mixed and subject to change. following the slowdown in economic activity throughout 2001, which was further aggravated by the negative shocks to confidence in connection with the terrorist attacks in the united states in september of that year, a moderate recovery of real gdp growth in the euro area was recorded at the beginning of 2002. indeed, at that time, projections prepared by the eurosystem's staff as well as forecasts by international organisations and private institutions agreed that euro area real gdp growth would again be in line with trend potential growth later in the year. however, as the year progressed, the recovery lost momentum, affected by the renewed turbulence in financial markets and geopolitical tensions, which had consequences for oil prices and confidence. overall, annual real gdp growth in the euro area is estimated to have been a disappointing 0. 8 % in 2002, after amounting to 1. 4 % in 2001. despite the subdued pace of economic recovery, hicp inflation remained

national bank of serbia governor ’ s opening remarks at the presentation of the inflation report – february 2017 dr jorgovanka tabakovic, governor belgrade, 22 february 2017 ladies and gentlemen, welcome to the presentation of the february inflation report. i would like to begin just as i will conclude – by summing up last year. namely, 2016 ended with yearon - year inflation of 1. 6 %, the fiscal deficit of 1. 4 %, the current account deficit of 4 %, the npl level of 17 %, foreign direct investment of eur 1. 9 bln and the customary inflow of remittances of 2. 6 bln. why am i starting off like this? it is because the fiscal deficit of 1. 4 % was lowered by 2. 3 percentage points relative to the year before, the current account deficit fell from 4. 7 % to 4 %, and the level of npls fell by 4. 6 percentage points to 17 % compared to the end of the last year – these being preliminary results. all these are reasons which underpin our decision to start this year with the new target of 3. 0±1. 5 %. the results from 2016 justify our decision to lower that target. i expect this will be the best confirmation that serbia ranks among the countries running low and stable inflation. inflation is expected to move within the target tolerance band as of early this year, on account of the effects of past monetary policy easing, the recovery of domestic demand and global oil prices, and a gradual rise in inflation abroad. the key risks to the projected inflation path are related primarily to the international environment, notably the diverging policies of the leading central banks – the federal reserve and the european central bank, as well as uncertainties associated with movements in oil prices. the federal reserve raised its rate in december and it became probable that the pace of rate hikes would be faster than expected. on the other hand, the european central bank ’ s decision to extend its quantitative easing programme until at least end - 2017 signals the continuation of the bank ’ s monetary accommodation, expected to moderate adverse effects of the fed ’ s policy. what i wish to highlight is that today serbia is more resilient to all external shocks thanks to the improved macroeconomic fundamentals, such as the narrowing of internal and external imbalances set in place by fiscal and structural adjustments. in particular, the fiscal deficit was slashed from 6. 6 % in 2014 to 1