Tabakovic: Inflation falling, GDP growth lower than expected, 2.1% this year

Inflation has slowed in the past two months, to 2.9% in September and 2.8% in October, primarily under the influence of the Regulation on the limitation of trade margins on food products and household chemicals, said the Governor of the National Bank of Serbia (NBS), Jorgovanka Tabakovic.

At the presentation of the inflation report, she said that the trend of slowing inflation would have continued even without the Regulation, as confirmed by the drop in core inflation to 3.8%. The NBS projects that inflation will remain within the target range (3 ± 1.5%) during 2026.

According to her, economic activity grew by 2% year-on-year in the third quarter, below the NBS’s previous expectations, due to a weaker recovery in the services sector, a continued decline in construction and a slightly worse agricultural season. Therefore, the GDP growth estimate for this year has been lowered to 2.1%.

As she stated, with higher disposable incomes, more favorable credit conditions and the implementation of projects from the “Serbia Expo 2027” program, growth is expected to reach 3.5% in 2026, and around 5% in 2027, with a significant contribution from exports of services during the international exhibition.

The fiscal and external positions have remained stable, Tabakovic assessed. The fiscal deficit in the first nine months amounted to 0.8% of GDP, with a primary surplus, while the share of public debt was reduced to 43.4% of the GDP. Capital expenditures still account for 6–7% of the GDP, which, according to the NBS, contributes to strengthening production potential. Also, the current account of the balance of payments will be better than previously projected and will close at around 5% of the GDP.

Narodna banka Srbije Beograd

National Bank of Serbia

NBS

Jorgovanka Tabaković

inflation

GDP