Serbia’s annual consumer-price inflation reached 4.1% in September 2026, remaining within the National Bank of Serbia’s (NBS) target corridor of 3% plus or minus 1.5 percentage points. Core inflation stood at 4.9%, close to the upper limit of the target range, reflecting continued pressure from services prices.
The composition of inflation has become increasingly important. While food prices can respond to harvest conditions and fuel costs to movements in international markets, services inflation is more closely linked to domestic wages, rents, consumption and business operating expenses.
Average real wages in Serbia increased by 8.5% year on year in January–July, while household consumption continued to contribute to economic growth. Rising incomes support purchasing power, but can also sustain price pressures if productivity growth does not keep pace.
NBS Maintains Cautious Inflation Outlook
The central bank forecasts average inflation of 3.2% in 2026, followed by an increase to 4.3% in 2027. It expects annual inflation to remain within the target corridor throughout the projection period.
The NBS has identified upside risks associated with a prolonged energy shock and higher global prices for primary commodities. External cost pressures therefore remain a significant factor in Serbia’s inflation outlook.
Interest Rate Remains at 5.75%
The NBS kept its key policy rate at 5.75% in October. Although headline inflation remains within the target range, elevated core inflation, rapid credit growth and uncertainty surrounding international energy markets support a cautious monetary policy approach.
Financial-sector inflation expectations remain anchored within the central bank’s target corridor, providing scope to maintain policy stability without abrupt changes in interest rates.
Wage Growth and Investment Demand Could Sustain Price Pressures
Serbia’s planned investment and construction activity in 2027 is expected to coincide with continued growth in household incomes and domestic demand.
Potential capacity constraints in labour, housing, construction services and imported energy could contribute to renewed inflationary pressure as economic activity expands. The persistence of services inflation, developments in energy costs and the pace of domestic demand will therefore remain important factors for monetary policy as Serbia enters its next investment cycle.
