to get to grips with any additional challenges ahead! however, there are things that keep me awake at night : - first, the media – their unprofessional, sensational and incomplete reporting on the crisis has played a significant role in the withdrawal of household deposits. thus, in percentage terms, more money was withdrawn from banks in serbia than in countries that have three times lower capital adequacy ratios and which saw government rescue packages worth a dozen billion euros! it is as if the media were competing in the dissemination of bad economic news, trying to convince the public that everything “ is the same as it was two decades ago ” even though everybody knows it is not! - second area of concern is action taken outside serbia : measures taken by some governments within the eu, and by the brussels itself, have been only halfmeasures. they were not targeted enough and it will take quite a while before they kick in. hence, it is very difficult for us in serbia to take any measures that would complement those taken abroad! although everyone seems to be falling over themselves in making promises, substantive details are scarce and the money even scarcer : save in england! let me illustrate this by asking : will the interbank market in serbia revive or just liven up briefly if banks in frankfurt, vienna or athens continue to mistrust one another? somehow, i doubt it. - the third reason for concern are the financial systems of the neighbouring countries : a stable banking system in serbia is not sufficient in itself because if anything goes wrong in the region, it is bound to produce consequences for serbia as well. to foreign institutional investors looking for emerging market opportunities it is all one and the same thing, although we, of course, know it is not. - and finally, how much longer will this last and how much further will it go? i truly hope that the pessimists will be proved wrong and that the sums invested by central banks and governments of major world countries will manage to prevent the worstcase scenario. let us be clear – there are no magic bullets, just as there are no absolutely good or bad solutions. we should, however, keep our mind on the objectives of the national bank of serbia – the primary being price stability and the secondary, financial stability. for this very reason, the national bank of serbia ’ s monetary policy committee will, next monday at the latest, consider the enactment of the following measures : - to increase the share of foreign currency required

jorgovanka tabakovic : overview of recent monetary and macroeconomic trends in serbia introductory speech by dr jorgovanka tabakovic, governor of the national bank of serbia, at the presentation of the inflation report – may 2016, belgrade, 24 may 2016. * * * ladies and gentlemen, welcome to the presentation of the may inflation report. as always, we will give you an overview of recent monetary and macroeconomic trends and our expectations for the period ahead. let me start and conclude my speech by discussing the same topical news! we have revised our gdp growth projection for 2016 from 1. 8 % upwards. we now expect that the serbian economy will end this year with a growth between 2. 3 % and 2. 5 %. allow me to underline that, given the current movements, it is far more likely that the year - end gdp growth rate will be at the upper bound of the projection range, i. e. at 2. 5 %. and it is not that we are being overly optimistic ; this projection is based on models, mathematics and indicators. if we compare the latest macroeconomic data with those presented in the february report, it is evident that the economic recovery of the republic of serbia has continued, and more importantly, that the growth is based on long - term sustainable foundations. and that is why the macroeconomic outlook for the period ahead has been revised upwards relative to the previous report. in the first three months of the year, fiscal deficit contracted by a quarter from the same period last year and equalled 1. 7 % of the estimated gdp, as compared to 2. 4 % in the same period a year earlier. the current account deficit of the balance of payments has more than halved compared to the corresponding period in 2015 – it equals 3. 3 % of the estimated gdp and remains fully covered by foreign direct investments. our fiscal outlook has improved in response to a sustainable rise in tax revenue, while the narrowing of the current account deficit has been driven by more favourable trends in external trade. last time we met at the presentation of the february report, we expressed no doubts as to the continuation of growth in exports and economic activity in the coming years. indeed, the growth has continued up, and has done so at an even faster pace than expected. export growth, measured in euro terms, was exceptionally strong – it came at 13. 4 % yеаr - on - year in the first quarter, and is without any doubt