NBS: Inflation within target band, estimate of GDP growth in this year lowered to 3.5%

The inflation in Serbia is within the target band, but the estimate of the growth of the gross domestic product (GDP) for this year is reduced from 4.5 to 3.5% due to the events in the global market, but also in the country, emphasized the governor of the National Bank of Serbia (NBS), Jorgovanka Tabakovic.

She said that global events, primarily the increase of the customs rates, had an impact on the macroeconomic trends in Serbia and the projections for the next period.

– That uncertainty, the kind of which has not been seen since the coronavirus pandemic, as well as the protests and blockades in Serbia, contributes to investors and consumers’ caution. Next year, the inflation in Serbia will be within the target band of three percent, plus or minus 1.5% and it will have a downward trend and, by the end of this year, reach the central target value – she said.

A restrictive monetary policy, a lower imported inflation and a drop in the price of energy, as well as the new agricultural season, which is expected to be average, leading to a lowering of the prices of fruit and vegetables and lower food production costs, will contribute to such inflation trends, she said.

The NBS has lowered the projection of the GDP growth for this year, because the growth in the first quarter was lower than expected and amounted to 2%, and also due to issues in the European automobile industry, which has had an impact on domestic production as well, but also due to rising uncertainty caused by global protectionism and reduced activities in the domestic service sectors, primarily commerce, hospitality and tourism, which, they estimate, has been influenced by the protests and blockades.

Narodna banka Srbije Beograd

National Bank of Serbia

NBS

Jorgovanka Tabaković

inflation in Serbia

GDP of Serbia

gross domestic product