The Committee reviewed the NBS following reports: 2017 Annual Monetary Policy Report, Semi-Annual Monetary Policy Report for the period January - June 2017, Annual Report on business transactions and results achieved in 2017, 2017 Annual Financial System Stability Report, 2017 Financial Report accompanied by the authorized auditor’s report, National Bank of Serbia Governor’s Council Activity Report for the period 1 January - 30 June 2017, National Bank of Serbia Governor’s Council Activity Report for the period 1 July - 31 December 2017 and the National Bank of Serbia 2018 Financial Plan.

The Committee members accepted the proposal of Committee Chairperson Dr Aleksandra Tomic to complete a single debate on items 1 to 8 on the agenda.

The NBS reports and plan were presented by the Governor of the National Bank of Serbia Dr Jorgovanka Tabakovic, who said that she was personally proud of the NBS achievements in 2017 – maintaining economic and financial stability and being responsible toward the goals it set. In 2017 the NBS maintained the inflation rate, the target tolerance band was reduced from 4 to 3% and it averaged 3% in the past year. The inflation rate in the last five years was on average 2% - core inflation was 1.8% and in late 2017 it was 1.3% interannually. The NBS worked on mitigating the inflation pressures and with it facilitating business dealings and supporting the growth of employment and living standards, Tabakovic concluded. She said that the international rating agencies declared it all a success, opining that the NBS credibility growth was well-earned. The inflation is under control and the responsible monetary policy led to a decrease in the reference interest rate to 3.5% which in turn resulted in lower interest rates for RSD loans – now 4.5% for businesses i.e. three times lower than in 2013. The interest rates for personal loans, both in RSD and EUR, have also gone down now being half that in 2013, said Tabakovic. The NBS also dealt with problematic loans reducing their levels by half in the last three years. On 30 June 2018 they stood at 7.8%. The 2.1% fiscal surfeit is sustainable and the GDP deficit had been halved in the last three years. The deficit in balance of payments was covered by the net income from direct foreign investments. The export of goods and services was accelerated to 11.2% in 2017, from 10.5% in 2016. The processing industry export rate was also accelerated to 13.6% and of services to 14.6%. The GDP growth rate, outside of agriculture and partly energy production due to inclement weather, was accelerated to 3%, and foreign investment went up by 27% compared to 2016, to 2.4 billion RSD, said the Governor. She reminded the attending that the dinar remained stable in 2017 and the NBS prevented oscillations by intervening at the international banking market on both sides. The NBS of a net buyer of 725 million EUR and maintained the foreign currency reserves at 8.3 billion EUR. Also, the financial sector maintained its stability in 2017 and the banking sector is liquid, adequately capitalized and resilient. Tabakovic added that in 2017 the NBS worked on improving the relevant legislation and developing the payment system i.e. developing instant payment as the most up-to-date system of payment today. The Governor concluded that the NBS had shown to have the instruments, resolve and skills to maintain long-term financial stability.

Speaking of the structure of private placement in 2017, NBS Vice-Governor Zeljko Jovic said that of the 900 billion RSD in question, about 40% went for housing and cash loans. Business loans amounted to 1,060 billion RSD, 50% of which went to circulating capital and about 31% for investment loans. Jovic added that the interest rate for personal loans in RSD was 10.58% and 4.21% for the ones indexed in EUR, whereas for business loans it was 4.75% for RSD loans and 2.81% for foreign currencies.

Following a lengthy debate the Committee members accepted the reports of the National Bank of Serbia for 2017 and 2018 Financial Plan.

The Committee went on to review the Regulatory Authority for Electronic Media 2018 Financial Plan presented by REM Council Deputy Chairman Goran Petrovic. He said that compared to 2017, the 2018 Financial Plan has been reduced by 18%, while the number of employees has remained the same in the last four to five years. Responding to the Committee members’ questions Petrovic said that the REM pays a lease for its offices under the lease agreement with the union, 9 EUR per square meter, which is the lowest possible price and amounts to 4.6% of the financial plan.

The Committee members unanimously decided to propose that the National Assembly grant consent to the Regulatory Authority for Electronic Media 2018 Financial Plan and will consequently send it a Decision Proposal to grant said consent.

The sitting was chaired by Committee Chairperson Dr Aleksandra Tomic and was attended by the following Committee members and deputy members: Zoran Bojanic, Sonja Vlahovic, Goran Kovacevic, Olivera Pesic, Srbislav Filipovic, Milan Lapcevic, Dr Milorad Mijatovic, Vojislav Vujic, Zoltan Pek, Momo Colakovic, Milorad Mircic, Veroljub Arsic and Zoran Despotovic, as well as MP Srdjan Nogo who is not a member of the Committee.