13/08/2026
At its meeting today, the NBS Executive Board decided to keep the key policy rate at 5.75%, also maintaining the interest rates on deposit (4.5%) and lending facilities (7.0%) at their current levels.
In making this decision, the Executive Board primarily took into account the actual and expected inflation developments, as well as risks stemming from the international environment that could affect inflation.
Y-o-y inflation continued to move within the target band (3±1.5%), though sliding below the target midpoint of 3% in June and declining further to 1.9% in July. Inflation outturn in previous months was lower than expected, primarily due to the generous fruit and vegetable harvest, which was reflected in their prices. Having this in mind, as well as the fact that there have been no major second-round effects of the energy shock so far, the Executive Board expects inflation this year to be lower than projected in May and to remain within the 3±1.5% target band until the end of the projection horizon. Inflation is still expected to reach around 4% in September, primarily due to the low base effect from the previous year following the implementation of the decree capping retail trade margins.
Expectations regarding economic activity are also looking up, as according to the preliminary SORS estimate, real GDP growth in Q2 2026 accelerated to 3.6% y-o-y, having measured 3.2% in Q1. According to the Executive Board’s assessment, the largest positive contribution came from the services sectors, as a result of private consumption growth, with the acceleration also supported by a rebound in activity in manufacturing, mining, construction and agriculture.
Although the effects of the escalation of the Middle East conflict and the rise in global oil prices on global inflation and economic activity have so far been less extensive than originally expected, uncertainty regarding further developments remains pronounced. The mitigation of the consequences on the domestic market has been supported by the use of available energy stocks and the limited pass-through effect of the energy shock, thanks to the reduction in the excise tax on petroleum products. Nevertheless, should the Middle East conflict persist or geopolitical tensions escalate further, the possibility cannot be ruled out that the effects could spill over onto production and transport costs, supply chains, capital flows and, by extension, inflation. The Executive Board emphasized that for Serbia, as a small and open economy that significantly relies on energy imports, it is necessary to continue with the careful monitoring of these risks.
The NBS continues to pursue a cautious monetary policy, while maintaining relative stability of the exchange rate. The Executive Board will make its decisions based on incoming data and their impact on inflation developments. Should it assess that the increase in global oil prices is generating more pronounced second-round effects on other prices through inflation expectations, the NBS will respond using all available instruments.
At today’s meeting, the Executive Board adopted the August Inflation Report with the latest macroeconomic projections that will be presented to the public in more detail at a press conference on 19 August, along with additional explanations of monetary policy decisions.
The next rate-setting meeting will take place on 10 September.
Governor’s Office
