Inflation in Serbia spiked to 4.3% in July 2024, marking the first year-on-year increase since March 2023. This rise follows a period of declining inflation, and the National Bank of Serbia (NBS) attributed it to temporary price hikes in certain food products and services with regulated prices.
According to the NBS, these price increases are largely due to global market fluctuations and rising raw material costs. However, a report from the Republic Institute of Statistics highlights significant price hikes in utilities, such as a 9.4% increase in gas, 7.3% in electricity, and 10.6% in district heating. Rents have also surged nearly 13% compared to last year, and other utilities have seen similar increases.
The transport sector has also contributed to rising inflation, with fuel prices up by 10% year-on-year. Additionally, dining out and hotel stays have become 9.1% more expensive, and recreation and cultural activities have increased by 5.6%, with the latter seeing a 3.1% spike from June.
Food prices, while up by 1.4%, have seen notable increases in specific categories such as “sugar, jam, honey, and chocolate,” which rose by 9.3% due to cocoa production issues in Africa. In contrast, inflation in the Eurozone was 2.6% in July, a slight increase from 2.5% in June, with only Belgium reporting a higher rate at 5.5%.
Dejan Šoškić, professor at the Faculty of Economics in Belgrade and former governor of the NBS, attributes persistent inflation to delayed interest rate hikes by central banks, including Serbia’s. He notes that Serbia’s expansive monetary policy and pre-election fiscal measures also contributed to the inflationary pressure.
Šoškić highlights that wage increases, particularly in the state sector, are pushing up costs in the private sector as well, further prolonging inflation. Despite a decline in inflation earlier this year, wages have risen significantly, with the average net salary up 11.2% in May compared to the previous year.
Prime Minister Vučević, reflecting on the government’s first 100 days, has criticized high prices, margins, and monopolistic practices, noting that some products are significantly cheaper abroad than in Serbia.
