the underlying rate of monetary expansion remains strong, as reflected in the continued rapid growth of m3 as well as the still high level of credit growth. following several years of robust monetary growth and the continued vigour of the ongoing expansion in money and credit, liquidity in the euro area remains ample. in this environment, there are clear indications of upside risks to price stability at medium to longer - term horizons. therefore, monetary developments continue to require very careful monitoring, particularly against the background of the expansion in economic activity and still strong property market developments. to address the upside risks to price stability identified by the ecb ’ s economic and monetary analyses, the governing council has adjusted the monetary policy stance gradually in eight steps since the end of 2005. as a result, the minimum bid rate in the main refinancing operations of the eurosystem rose from 2. 00 % in december 2005 to 4. 00 % in june 2007. after the adjustments in the key interest rates, the ecb ’ s monetary policy remains still on the accommodative side, with overall financing conditions favourable, money and credit growth vigorous, and liquidity in the euro area ample. looking forward, firm and timely action continues to be warranted to ensure price stability over the medium term. the governing council will continue to monitor closely all developments in order to ensure that risks to price stability over the medium term do not materialise. fiscal policies as regards fiscal policies, the ecb shares the view expressed in the draft resolution that fiscal consolidation is key and all the more necessary in good times in order to achieve longterm growth. in a benign environment, budget balances in 2006 were generally better than expected. it is imperative that forthcoming budget plans build on this favourable outcome, assigning higher than expected revenues to deficit reduction and speeding up progress towards the achievement of medium - term budgetary objectives. the ecb is concerned about recent developments which point to a relaxation of fiscal targets in some countries, the aforementioned risk of pro - cyclical policies and a repetition of past policy mistakes. it is imperative that all governments comply with the provisions of the stability and growth pact on fiscal consolidation and that all the countries concerned honour the commitments made at the eurogroup meeting in berlin on 20 april 2007. as agreed in berlin, taking advantage of the favourable cyclical conditions would enable most euro area countries to achieve their medium - term objectives in 2008 or 2009, and all of them should aim for 2010 at the latest. these

national bank of serbia governor ’ s opening remarks at the presentation of the inflation report – august 2018 dr jorgovanka tabakovic, governor belgrade, 15 august 2018 ladies and gentlemen, esteemed members of the press, dear colleagues, welcome to the presentation of the august inflation report. as always, we will give you an overview of monetary and macroeconomic trends for the period since the previous report and set out our expectations for the period ahead. given that on 6 august i rounded off my first term of office as the governor, allow me, before i give the floor to my colleagues, to briefly dwell on some of the results achieved over the last six years, since results are the right and only measure of success. as you have witnessed yourself, in the past six years serbia has been transformed into a stable and promising economy – an economy with low and predictable inflation, balanced fiscal account, reduced external imbalances, a downward trajectory of public and external debt, growing investment and recovered labour market. today we live in a country with a significantly lower risk premium, an upgraded credit rating and a better position on the international competitiveness lists. progress is also reflected in lower interest rates and, by all means, in the preserved value of the dinar and opened possibilities for raising our income, all of which boosts investment, exports and production. in such an ambience, serbia ’ s gross domestic product has been on the rise for eleven quarters in a row and, according to our latest projections, this year its growth rate is going to measure 4 %. this is by 0. 5 percentage points more than what was envisaged by our may projection, owing to a faster than projected growth in construction and agriculture – on the production side, and a faster pick up in investment – on the expenditure side. we expect such movements to continue in the period ahead, given that favourable conditions at home support growth in investment and exports and, by extension, higher employment and living standard of citizens. most importantly, the results achieved are long - term and lasting. for five years in a row, inflation has been low, stable, predictable and comparable to that in european countries, and the nbs is trusted that inflation will remain low in the future as well. what we consider our most important result is that low inflation has become a normality in serbia, which means that we have succeeded in achieving our primary objective, mandated by law. not so long ago, in the autumn of 2012, year