Serbia’s inflation picture in 2026 is increasingly split between relatively contained consumer prices and significantly faster increases in costs facing the construction sector. Consumer-price inflation stood at 1.9% in July, while prices of construction materials and components rose 10.8% year on year in June. The gap extends across other segments of the economy. Industrial producer prices increased by 7.0%, regulated prices by approximately 7.3%, and import prices by 3.8%.
The divergence has become a significant feature of Serbia’s business environment as the country enters a major capital-investment cycle. The low headline consumer inflation rate therefore does not reflect the cost pressures affecting companies involved in infrastructure, property development and construction.
Food Prices Weigh on Headline Inflation
The 1.9% July CPI rate has been supported by sharply lower food prices, reflecting an unusually favourable agricultural season. The continuing impact of earlier restrictions on retail margins has also contributed to keeping consumer-price inflation subdued. Businesses operating in construction face a different cost structure. Their expenses are influenced by energy prices, metals, imported equipment, intermediate goods, labour costs and the level of construction demand. As a result, Serbia can simultaneously record very low consumer inflation while the costs associated with roads, railways, housing and municipal infrastructure increase at double-digit rates.
Construction Costs Create Pressure for Contractors and Developers
The divergence has direct implications for companies participating in Serbia’s investment cycle. Contractors face greater pressure to account for changes in input prices when preparing bids, while developers must contend with higher replacement costs for construction materials and components.
Infrastructure owners also face decisions over how to manage rising project costs. Higher input prices can require larger budgets, reductions in project scope or the transfer of a greater share of inflation-related risk through contractual arrangements. The pressure is not limited to construction materials. Industrial producer prices were already increasing at 7.0%, while regulated prices were rising by approximately 7.3%. Import prices, meanwhile, were up 3.8%, adding another layer to the cost environment for companies dependent on imported goods and equipment.
Core and Service Inflation Remain Elevated
The divergence is also visible within consumer-price inflation itself. Core inflation remains well above the headline rate, while service inflation continues to be elevated. The current CPI reading is therefore partly shaped by temporary or favourable factors rather than representing the full range of price pressures affecting businesses and households. Headline inflation is expected to move back above 4% from September, as favourable food-price effects and the base effects associated with earlier retail-margin restrictions begin to reverse.
The expected increase does not indicate another inflation crisis, but rather a return from an unusually low headline CPI rate toward a broader cost environment in which different sectors continue to face substantially different price pressures. For households, 1.9% is the current measure of consumer-price pressure. For contractors, infrastructure investors and developers, the 10.8% annual increase in construction materials and components provides a more relevant measure of the inflation affecting project costs.
