NBS: Inflation in Serbia in July 12.8%, Peak of 14% Expected in September

The National Bank of Serbia (NBS) announced today that the y-o-y inflation in Serbia in July amounted to 12.8% and that, according to the projections, it would reach its peak of 14% in September, whereas, on an annual level, an average inflation of 11 to 11.5% is expected. As said at the presentation of the Inflation Report, the NBS expect the inflation to start dropping from October and to enter the target band in the first half of 2024.

It was pointed out that it was not realistic for the inflation to be lower than estimated and that it should remain increased all the way up to mid-2023, under such geopolitical conditions and with such a bad agricultural season.

– Under the impact of elevated cost-push pressures mainly from the international environment, inflation in Serbia continued to move along an upward trajectory and touched 12.8% y-o-y in July, of which around 70% comes from food and energy prices – said the governor of the NBS, Jorgovanka Tabakovic.

Tabakovic said that the NBS, in May, when they had data on April inflation, assumed that inflation would continue up over the following several months, but that the intensification of geopolitical tensions and worse than expected agrometeorological conditions led to a higher than envisaged rise in food and energy prices over the previous months.

She reminded that, in the period since the previous Report, inflation in most countries had continued to rise above expectations, reflecting primarily the surge in energy and food prices, which intensified further with the outbreak of the Ukraine conflict.

The NBS says that, when it comes to local factors, projection risks mostly pertained to the outcome of this year’s agricultural season, and also the trends in the energy sector, regarding the scope of the production of coal and electrical energy in the local market and at which prices a part of the gas will be imported above the level agreed with Russia, but also the potential measures taken by the Government of Serbia in order to ensure energy security in the local market.

Vlada Republike Srbije

Narodna banka Srbije Beograd

Government of Serbia

National Bank of Serbia

NBS

Jorgovanka Tabaković

inflation in Serbia

Inflation Report

year on year inflation

production of electrical energy