The NBS Head Office Building was built from 1888 – 1890, on the basis of blueprints designed by Konstantin Jovanovic (Vienna 1849 – Zurich 1923), son to distinguished artist Anastas Jovanovic...
12/04/2023
According to SORS data, in March inflation measured 0.9% m-o-m and 16.2% y-o-y, in line with NBS projections for Q1. Similarly to the previous month, the monthly inflation path was marked notably by rising food prices and, to a lesser extent, price increases within core inflation. Around two thirds of contribution to headline inflation still relate to food and energy price growth.
In March processed food prices picked up 0.8% relative to February, which is smaller growth compared to previous months.
Unprocessed food prices were up 3.8%, led by higher vegetable prices. Y-o-y, in March the prices of food and non-alcoholic beverages rose by 25.4%, primarily due to supply-side factors on which monetary policy measures have a limited effect. These primarily include the pass-through of elevated cost-push pressures from the prior period and negative effects of last year’s drought in Serbia and most of Europe. On the other hand, energy prices declined softly, by 0.1% m-o-m in March, due mainly to a further decline in solid fuel prices, while the prices of petroleum products remained unchanged, on average.
The monthly increase in prices within core inflation was slower compared to headline inflation, equalling 0.6% in March. Y-o-y, core inflation (CPI excluding food, energy, alcohol and cigarettes) is still much below headline inflation – in March it measured 11.3%, largely reflecting the preserved relative stability of the exchange rate amid exceptionally volatile global conditions.
Under the current projection, we expect inflation to strike a downward path as of Q2 and decline more vigorously in H2 2023, ending the year at a level twice lower than now. Acting towards the calming of inflationary pressures will be the past tightening of monetary conditions, the weakening of effects of global factors that led the past growth in energy and food prices, a slowdown in imported inflation, and dented external demand amid the anticipated slowing of global growth.
Governor's Office
