Financial and corporate sectors expect 4.2-6.7 pct one-year ahead inflation

BELGRADE - According to a January Ipsos survey, one-year ahead inflation expectations of the Serbian financial sector measured 4.5 pct, which is a decrease from the previous month (5.0 pct) but also a return to within the bounds of the National Bank of Serbia (NBS) target band after almost two years, the NBS said in a statement.

The last time the expectations were within the target band was in February 2022, it said.

"The latest Bloomberg survey from February points to additionally lower inflation expectations as one-year ahead expectations (for February 2025) stood at 4.2 pct.

Short-term expectations of the corporate sector also declined – from 7.0 pct in December to 6.7 pct in January.

Two- and three-year ahead inflation expectations of both the financial and the corporate sector are lower than short-term expectations. Financial sector expectations decreased for both periods, to 3.5 pct for two years ahead (4.0 pct in December) and 3.3 pct for three years ahead (3.4 pct in December). Thus, medium-term inflation expectations for both periods continued moving within the NBS target tolerance band. Medium-term corporate expectations measured 5.0 pct for both two and three years ahead and were unchanged from the previous survey," the central bank said.

"Financial sector expectations and corporate two- and three-year ahead expectations indicate that both sectors anticipate dissipation of inflationary pressures in the coming period and inflation’s gradual return within the target band," it also said.