Tabakovic: Serbian inflation to hover around 4 pct by mid-year

BELGRADE - According to the latest projection of the National Bank of Serbia (NBS), Serbian inflation is expected to hover around 4 pct by mid-2025 and then slow down in the second half of the year and approach the 3±1.5 pct target midpoint around the end of the year, NBS Governor Jorgovanka Tabakovic said on Wednesday.

Presenting the NBS May Inflation Report, adopted by the central bank's Executive Board on May 9, Tabakovic said y-o-y inflation had slowed down to 4 pct in April, with core inflation slowing to 5 pct, its lowest level since May 2024.

"In its April projection, the IMF expects inflation to average 4.0 pct in 2025 and then edge down moderately to 3.3 pct in 2026, where it will remain in 2027," Tabakovic said.

"According to our latest central projection, over the entire projection horizon, i.e. the following two years, inflation should remain within the target tolerance band (3±1.5 pct) and will have a declining trajectory this year.

More specifically, inflation should continue to slow down from the level of 4 pct, where it is expected to hover by mid-year, and approach the target midpoint around the end of the year, where it will remain until the end of the projection horizon," Tabakovic said.

"Such inflation movements will be largely facilitated by the still tight monetary conditions, lower imported inflation and the anticipated lower global prices of energy, as indicated by the projections of relevant international institutions, as well as by market futures.

The arrival of the new agricultural season in May, assumed to be average, should also result in lower prices of fruit and vegetables, and decreased costs of food production," she said.