The National Bank of Serbia (NBS) has kept its benchmark interest rate at 5.75%, as rising energy costs threaten to push inflation higher and increase pressure on companies financing production, expansion and new capacity.
The central bank said annual inflation could approach 4% from September, compared with 2.2% in August, as higher oil, gas and electricity prices feed through production, transport and consumer costs. The decision maintains a cautious monetary stance even as the NBS continues to expect relatively strong economic growth. The central bank retained forecasts of at least 3.2% growth in 2026 and approximately 4.5% in 2027, with domestic demand and investment expected to support expansion.
Industrial producer prices accelerate
Serbian industrial producer prices rose 9.6% year on year in September, with manufacturing prices recording a similar increase. Mining recorded the strongest increase, with producer prices rising 38.4%, reflecting substantial price movements across the extractive sector.
Producer-price growth does not automatically translate into equivalent consumer-price increases, but sustained factory-gate inflation can place pressure on corporate margins and increase the potential for higher costs to reach households. The developments are particularly relevant for Serbia’s export-oriented manufacturing sector, where automotive suppliers, metals processors, construction-material producers and engineering companies operate within European supply chains.
Energy costs affect investment returns
Companies in these sectors often have limited scope to pass higher energy and transport expenses directly to customers, particularly where European buyers have substantial pricing power. Manufacturers investing in automation, production expansion and energy-efficiency measures therefore face the combination of unchanged borrowing costs and higher operating expenditure.
The exposure is particularly significant for energy-intensive industries such as metals, chemicals and building materials. Serbia’s industrial investment model has relied on competitive labour costs, access to European markets and government incentives. Productivity and energy efficiency are becoming increasingly important to the competitiveness of companies operating under higher input costs.
Businesses with modern equipment, long-term electricity contracts and stronger balance sheets are better positioned to absorb the inflationary environment, while smaller manufacturers dependent on bank financing and short-term energy procurement face greater exposure.
Corporate credit remains elevated
For Serbian banks, the NBS decision maintains a relatively stable interest-rate environment but postpones the possibility of lower borrowing costs for companies. Outstanding bank loans reached approximately RSD 4.82 trillion, or €41 billion, at the end of September, representing annual growth of about 15.7%.
Household lending expanded faster than corporate borrowing, supported by cash loans, mortgages and consumer financing. The continued expansion of credit is supporting domestic demand while increasing the importance of keeping inflation expectations contained.
If energy prices remain elevated, the NBS could have less scope to reduce interest rates even as businesses deal with higher financing and operating expenses. The effects extend beyond manufacturing to property developers, infrastructure contractors and companies financing working capital, which could face a longer period of relatively expensive credit.
Growth forecasts remain above 3%
Serbia’s economic expansion continues to receive support from public infrastructure spending, preparations for Expo 2027 and investment in automotive production. The World Bank forecasts economic growth of 3.1% in 2026 and 3.7% in 2027, below the NBS projections. The differing forecasts reflect uncertainty surrounding the strength and durability of the recovery.
Higher inflation could alter the financial attractiveness of individual investment projects without necessarily stopping investment activity. Companies with predictable revenues, strong export contracts and efficient production systems would have different cost exposure from businesses dependent on inexpensive financing or low operating costs. The next consumer inflation figures will indicate whether the increase in industrial prices recorded in September is feeding into broader price pressures. For Serbian companies, the combination of higher input costs and elevated interest rates places greater emphasis on productivity gains and operating efficiency when evaluating new investment and expansion.
