The European Central Bank (ECB) and the National Bank of Serbia (NBS) are set to make key decisions on interest rates that will impact the eurozone and the Serbian market. ECB last adjusted rates in June, cutting them by 0.25 percentage points, while NBS has kept rates unchanged since September 2024.
Economic uncertainty, including the collapse of the French government and France’s high public debt of 116% of GDP, may influence ECB’s decisions, alongside Germany’s 63.5% debt and broader eurozone economic conditions. Inflation in the eurozone is currently low, with August figures at 2.1% overall and 2.3% core inflation, supporting a hold on rates.
ECB interest rates directly affect Serbian citizens, as most housing loans are tied to the euro. A rate cut could lower borrowing costs, while NBS is expected to maintain its current policy amid rising domestic inflation, which increased from 3.8% in May to 4.9% in July. Changes by NBS are unlikely, and measures like margin regulations or rate cuts will likely have only short-term effects, as banks and retailers find ways to circumvent them.
