Serbia’s inflation started 2026 at a lower level than during the previous inflation cycle, according to March data. Annual inflation was 2.8% in March, below the National Bank of Serbia’s 3.0% ± 1.5 percentage point target band. Monthly inflation was 0.5% in both February and March.
The monthly figures indicate limited price acceleration across the two months. Core inflation eased from 0.3% in February to 0.1% in March on a monthly basis. Non-core inflation rose from 0.7% to 0.8% over the same period.
Core and non-core trends shape the inflation profile
The annual core inflation rate remained at 4.2%. Non-core inflation increased from 1.0% to 1.7%. The data suggest that inflation is not broad-based in the same way as during earlier shock conditions, while volatile components are again gaining weight.
Fuel-related items were among the clearest contributors to March price pressure. Diesel prices rose 5.1% month-on-month, while petrol increased by 4.2%. Tobacco was up 2.3%, and alcoholic beverages rose by 1.2%.
Some categories offset part of those increases, including a 3.6% decline in fruit and vegetable prices. Even with that offset, the overall pattern points to sensitivity tied to energy and regulated or semi-regulated price categories.
NBS maintains cautious stance amid energy and external risks
The National Bank of Serbia kept its reference rate at 5.75%, maintaining a cautious stance in place since September 2024. With inflation below 3%, an accelerated easing path could be considered based on headline dynamics alone, but policy remains constrained by external and energy-linked risks.
The central bank’s caution is linked to exposure to oil prices, geopolitical disruption, imported energy costs and an unresolved refinery issue referenced as . The monetary-policy challenge extends beyond current inflation readings, with attention on the possibility of renewed cost pressure.
Serbia imports part of its inflation through fuel, energy, commodities and a euro-denominated supply chain. The dinar’s stability against the euro helps contain imported price pressure, but that stability depends on confidence, reserves and interest-rate credibility.
Pančevo refinery uncertainty and implications for consumer prices
Energy-sector uncertainty is described as especially important for the outlook. The unresolved issue around the Pančevo refinery, referenced as , has implications beyond industrial production.
The refinery situation can affect fuel availability, transport costs, wholesale margins and expectations. A disruption could feed into consumer prices quickly, particularly through diesel and petrol.
Households and firms track wages, retail demand and financing costs
The current inflation environment is described as supportive for households based on February wage dynamics. Real wages rose by 9.5% year-on-year in February, supporting purchasing power.
Retail turnover rose strongly in March, supported by that income effect. Household confidence can weaken when fuel and food prices move faster, particularly for lower-income consumers with budgets more exposed to essentials.
For businesses, lower inflation reduces uncertainty, while high interest rates continue to affect financing conditions. Financing costs remain relevant for working capital, investment loans, inventories and construction projects.
Banks are still lending, but companies need to manage margins amid rising wages, uneven external demand and ongoing energy risk that has not disappeared.
Cautious policy focus continues into 2026
The central bank’s task in 2026, based on the available data, is to preserve credibility while the real economy moves through a mixed cycle. Price stability is described as a defence rather than a weakness.
The next potential inflation shock is expected to be more likely to arrive through energy conditions and external markets than through domestic demand alone.
