Interannual inflation in Serbia at the end of 2023 is expected to be at a level of around eight percent, it was stated in the “Inflation Report – August 2023” of the National Bank of Serbia.
According to NBS estimates, inflation is expected to return to the target range in the second quarter of 2024, which is slightly earlier than the previous projection, Tabaković said. The report also states that year-on-year inflation has been declining since April and that in June it was 13.7 percent.
Tabaković pointed out that year-on-year inflation in July was 12.5 percent.
The slowdown in inflation, as he writes, is largely the result of lower prices for processed food and energy, but also lower base inflation, which dropped to 9.9 percent in June.
Year-on-year inflation will continue to slow down
According to the new projection, year-on-year inflation will continue to slow down, which will be contributed to by the effects of the previous tightening of monetary conditions, further weakening of global cost pressures and a high base in energy and food prices.
As stated, the reduction of inflation will be influenced by the slowdown of import inflation and lower demand in conditions of slower global economic growth.
GDP between 2 and 3 percent
The growth rate of the gross domestic product (GDP) of Serbia this year will be between two and three percent, with the fact that it will be closer to the lower limit of the projected range, it was stated in the “Inflation Report – August 2023”, which was presented today at the National Bank of Serbia.
As estimated, GDP growth will be led by net exports, as a result of real growth in exports and decline in imports of goods and services so far this year, as well as fixed investments thanks to increased profitability of the economy, high inflows based on foreign direct investments (FDI), as state investments in transport infrastructure.
From 2024, acceleration of GDP growth to three to four percent
The Central Bank expects GDP growth to accelerate to three to four percent from 2024, and then return to the pre-pandemic growth trajectory of around four percent.
This will be achieved with the reduction of global inflationary pressures, the recovery of the world economy, and thus external demand, as well as due to the expected acceleration of the implementation of planned investment projects in the field of transport, energy and communal infrastructure.
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