NBS: We Expect Two Times Lower Inflation in 2023

Inflation in Serbia at the end of 2023 could be two times lower than at the start of the year, and in the final quarter of 2022, y-o-y inflation measured around 15%, the National Bank of Serbia (NBS) announced today. They also expect Serbia’s GDP growth rate to range between 2-3% this year.

– Due to the weakening of global cost-push pressures, decline in imported inflation and effects of monetary policy measures, for the first time in two years the projected inflation for the current year is at a lower level than in the prior projection, and the projection for 2024 has been lowered to an even greater extent. We now expect inflation to return within the target tolerance band in mid-2024, which is sooner than previously expected – NBS Governor Jorgovanka Tabakovic said at the presentation of the February inflation report.

Tabakovic added that they expected y-o-y inflation to remain elevated in Q1 2023 as well, mostly due to the continued pass-through of high cost-push pressures from the previous period onto prices of food and other industrial products, and to the adjustment in electricity and gas prices.

– It is then expected to strike a downward path and decline more sharply in the latter half of the year, with inflation at end-2023 being two times lower than at the start of the year. Inflation is anticipated to retreat within the bounds of the target tolerance band around mid-2024, which is sooner than we expected in our previous projection – she emphasized and added that inflation’s decline should be supported by past monetary tightening, waning effects of global factors driving energy and food price growth in the past period, a slowdown in imported inflation, and subdued external demand amid the anticipated slackening of global growth.

Narodna banka Srbije Beograd

NBS

Jorgovanka Tabaković

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