national bank of serbia opening remarks at the presentation of the inflation report – august 2019 dr zeljko jovic, vice governor belgrade, 14 august 2019 ladies and gentlemen, esteemed members of the press, dear colleagues, welcome to the presentation of the august inflation report, where colleagues from the economic research and statistics department will present to you in detail the current macroeconomic trends and our latest projections. in my introductory address i will touch on the key macroeconomic conditions in which monetary policy was implemented and on the decisions the national bank of serbia has made in the period since our previous report. first of all, i would like to say that favourable macroeconomic trends continued into 2019 – inflation is low and stable, macroeconomic and financial stability has been preserved, and the costs of financing have stayed low, feeding through into higher economic and investment activity. over the past six years inflation has been low and stable, at around 2 %, and is expected to remain so in 2019 and 2020. financial stability has been maintained and the issue of inherited non - performing loans resolved in a sustainable way – their level has been reduced by more than 70 % over the last four years and their share in total loans cut to 5. 2 %. relative to may 2013 when we embarked on the cycle of monetary easing, the interest rates on dinar loans for households are now twice lower and for corporates as many as three times lower. this served as a fillip to investments, which remain one of the key drivers of economic growth this year as well. the sustained positive fiscal trends, with a surplus of 0. 7 % of gdp in the first half of the year, are a reflection of the successfully implemented fiscal consolidation and full coordination of monetary and fiscal policies. all of this has been achieved in the face of unfavourable effects of some factors from the international environment, notably the slowing of global economic growth amid announcements of additional protectionist measures and heightened geopolitical tensions. at the same time, this is a proof that by strengthening our economy, primarily through the reduction of external and internal imbalances and through favourable macroeconomic prospects, we have increased its resilience to unfavourable effects from the international environment. since the may report, external financial conditions have been largely affected by the shift in the monetary policies of leading central banks, which are not only slowing the normalisation process, but also announcing additional monetary stimuli. thus, the federal reserve system lowered its policy rate for the first time since

the work of the vienna initiative climate change working group, which is co - chaired by the european investment bank, the european commission, the european bank for reconstruction and development and the world bank group. the goal of the working group is to discuss availability and quality of data, regulation and supervision, development and improvement of knowledge and capacity in the area of climate risks, as well as the transition process faced by many sectors. it is a good platform that enables the exchange of experience and plans, especially since the representatives of the european and global regulators are present in the working group, which gives an insight into the current and planned measures for managing and monitoring the risks related to climate change. ladies and gentlemen, there is no doubt that ecology must be one of the priorities of policy makers, and in serbia it is, because it is interwoven with many policies. also, all actors – from individuals to institutions and decision makers – must act responsibly. however, this does not mean that we should close factories that are not eco - friendly, but that every activity should be carefully measured, and that our task is to find sustainable solutions that will be the best for our citizens. this is evident in the example of the current global 3 / 4 bis - central bankers'speeches energy crisis, where it takes time to build alternative energy sources, and where energy security is a priority. this means that it is important to find the right measure and the right sequence of activities, and we all have to participate. today's event is a proper collective action. thank you for your attention and i wish you a successful first western balkans sustainable investing forum 4 / 4 bis - central bankers'speeches