all permitted by the excellent fiscal policy results. how did this reflect on dinar interest rates and lending activity? in the period from september 2013 to january 2016, banks cut interest rates on dinar corporate loans by 11. 7 percentage points, to 5. 9 %. interest rates on dinar household loans were lowered by 7. 9 percentage points on average, to 12. 1 %. overall, interest rates on dinar loans were more than halved relative to september 2013. you will agree this is neither a small nor a negligible amount. interest rates on euro loans were also reduced in the same period – by 2. 9 percentage points, to 4. 2 % in january, which is linked in part to the ecb ’ s accommodative monetary policy, but also to the reduction in serbia ’ s risk premium. this cleared the way for the recovery in lending activity and the expected growth in economic activity. we are aware that we cannot change external circumstances. geopolitical tensions, volatile movements in the global commodity and financial markets, unpredictable capital flows, weaker prospects of global recovery illustrate the existence of uncertainties. our joint strategic response must and can come through our will and determination to steadfastly complete the not so easy reforms that we have undertaken. this will undoubtedly accelerate economic growth and further reduce serbia ’ s exposure to external challenges. serbia ’ s improved growth prospects have been confirmed by world - known rating agencies, international financial institutions, but what is more important, by the behaviour of domestic and foreign investors. in the last year, investments gave a strong positive contribution to the achieved economic recovery. in financial terms, it was the inflow of fdis that gave an additional contribution, besides higher disposable income made available by lower costs of borrowing and lower price of energy products. what i would like to underscore is the rise in newly approved investment loans. in 2015, net fdi inflow in serbia rose by 45. 6 % from 2014 and came at eur 1. 8 bln, their highest level in the last four years. consequently, in 2015 serbia managed to use the net fdi inflow to more than fully cover its current account deficit which equalled eur 1. 6 billion. all this speaks of improvement in the quality of sources of funding, of improvement in the manner of final consumption of disposable assets, now used for investment rather than for consumption. finally, i believe that the results we have

the corresponding challenges has an inverse relationship with the level of development. allow me to provide some additional information in this regard : • the international monetary fund estimates that the median food share in total spending in advanced economies is 17 percent, compared to 31 percent in emerging and developing countries. 4 in addition, it is important to keep in mind that in a number of these countries, or in specific sectors of the population, the corresponding figure is much higher. 5 oecd - fao agricultural outlook 2013. shaun k. roache, “ what explains the rise in food price volatiliy? ”, imf working paper, wp / 10 / 129, may 2010. s. k. roache, op. cit. international monetary fund, world economic outlook, september 2011. k. anderson, m. ivanovic and w. martin, “ food price spikes, price insulation and poverty ”, policy research working paper, wps6535, the world bank, july 2013. bis central bankers ’ speeches • in this context, it is not surprising that, according to world bank calculations, the rise in food prices in 2010 – 2011 resulted in a net increase of 44 million in the number of people living in extreme poverty in developing nations. 6 • additionally, some recent studies conclude that increases in international food prices may give rise to a significant deterioration of democratic institutions, and to a higher number of internal conflicts, in poorer countries. 7 this underlines the importance of clearly understanding the factors that affect both the level and the volatility of food prices, as well as the challenges that public policy must confront in this respect. clearly, fluctuations in food prices are largely determined by supply and demand factors inherent to these markets, such as the pace of world economic activity, demographic changes, the implications of higher income levels in some countries for eating habits, climate related factors, and the availability of water and arable land, among others. however, the analysis becomes more complicated given that there are events outside the strict sphere of food markets which are affecting food price developments. it is worth to highlight in this regard that developments in energy markets affect food prices through a more intense use of energy in the production, processing, storage, and transportation of these commodities, as well as through the more widespread production of biofuels and the resulting rise in the use of food and agricultural inputs for this purpose. second, a growing interconnection is being observed between financial and food markets, as reflected