Serbia’s consumer inflation rate eased to 2.7% year on year in June 2026, but the structure of price growth shows continued pressure from services and energy costs despite a significant decline in food prices. The slowdown in headline inflation was largely supported by cheaper food and non-alcoholic beverages, while underlying domestic price pressures remained stronger. Services inflation reached 6.6%, energy prices increased 9.7%, and consumer prices excluding energy, food, alcohol and cigarettes rose 4.6%.
Food prices reduce headline inflation
Food and non-alcoholic beverage prices were 3.7% lower in June 2026 compared with the same month a year earlier. Within the category, unprocessed food prices declined by 5.8%, while processed food prices decreased by 2.5%.
The decline marks a reversal from mid-2025, when unfavourable agricultural conditions pushed food inflation into double-digit territory and contributed to a temporary rise in overall inflation to 4.9%. The latest figures indicate that food prices have become a disinflationary factor, reducing the headline consumer price index.
Services and energy maintain inflation pressure
Despite lower food prices, other parts of the consumer basket continued to record stronger increases. Services prices increased by 6.6% annually, more than double the headline inflation rate. Service-sector inflation is typically more persistent because it is linked to wages, rents, administrative charges and labour-intensive activities including hospitality, personal services, transport and maintenance.
Average earnings in Serbia have continued growing at double-digit nominal rates, while registered employment has remained broadly stable. Companies are therefore facing competition for a limited labour pool and are transferring part of higher wage costs into final prices. Energy prices increased by 9.7% year on year, creating additional pressure for households and businesses.
The impact extends beyond household electricity and fuel costs, affecting production expenses across manufacturing, logistics, retail, agriculture and construction. Energy-intensive industrial companies face higher operating costs at a time when European demand remains weak and exporters have limited ability to increase prices in international markets.
Monetary policy faces balancing challenge
The changing inflation structure creates a more complex environment for the National Bank of Serbia (NBS). Although headline inflation is now within the central bank’s target tolerance range, persistent services inflation above 6% limits the scope for rapid monetary easing. A faster reduction in interest rates could stimulate domestic borrowing and demand while service-sector price pressures remain elevated. At the same time, maintaining restrictive monetary conditions for an extended period could continue weighing on corporate investment and housing affordability.
Exchange-rate stability limits imported inflation risks
The Serbian dinar continued to support price stability by limiting imported inflation pressures. At the end of June 2026, the exchange rate stood at approximately RSD 117.37 per euro, remaining within the narrow range that has characterised Serbia’s managed exchange-rate policy. Strong foreign-exchange reserves provide the National Bank of Serbia with capacity to support exchange-rate stability.
The latest inflation trends indicate that the main challenge has shifted away from food supply conditions towards domestic cost pressures. While headline inflation has declined, households continue facing stronger increases in recurring expenses such as services and energy. The future path of inflation will depend increasingly on wage growth, productivity trends, energy costs and competition within service industries.
