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The Government of the Republic of Serbia

In the service of citizens

Stable prices crucial for economic development

Belgrade, 16 February 2007

Governor of the National Bank of Serbia (NBS) Radovan Jelasic said tonight that NBS’ main task is to maintain stability of prices as European experiences showed that only stable prices can contribute to economic development.

Jelasic said in a round table called “Stable Currency for a Healthy Economy” organised by the Serbian government’s EU Integration Office that NBS’ goal is that base inflation in 2007 is between 4% and 8% and recalled that last year’s inflation of 6.5% was leveled with neighbouring countries.

High inflation is bad for economic growth and causes social problems as it does not result in increasing GDP and employment, the Governor said and added that only financial stability can help increase exports.

Head of the administrative committee of the Societe General Bank Goran Pitic confirmed that stability of prices is the best way to increase economic growth.

Pitic stressed that Serbia's goal is a stable currency in a health economy, adding that Serbia is now in a stability zone though it faces a new wave of reforms since the environment towards which strives is changing.

Vice-President of France's Vanci Group and former EU Commissioner for Monetary Issues Yves Thibault de Silguy, the euro sign's creator, said that the currency has indubitably succeeded since it has become a stability factor in Europe.

According to de Silguy, the euro enabled the stability of prices and low interest rates and raised global awareness of the competitiveness of companies from the euro zone by excluding differences in currency rates and abolished the costs of currency conversion. Therefore tens of billions euros were saved on annual basis, he added.

De Silguy also said that this currency is Europe's shield from financial crises since 60% of commerce is done among countries which use the euro, adding that it is therefore important to include Serbia in the EU.