The National Bank of Serbia (NBS) states that the February inflation projection has not changed significantly compared to November 2022 and, moreover, the inflation projection for the current year will be lower, slightly but still lower, for the first time in two years.
The National Bank of Serbia, denying the writings of certain media, which state that the NBS predicts that inflation has not reached its peak, expects that year-on-year inflation in Serbia will begin to decline from the second quarter, and that from the second half of the year, with the expected decrease in inflation in the euro zone and the arrival of the new agricultural season begins to decline faster.
As stated, according to the basic scenario, taking into account all international and domestic factors, inflation should be at the level of 7 to 8 percent at the end of the year, while the target of 3 plus or minus 1.5 percent should be within return in mid-2024, reports Tanjug.
“When it comes to the dominant international risks of the projection, we estimate that they are still high, but still somewhat lower than they were three or four months ago, and we believe that the probability of a deviation from the projected inflation is equal in both directions,” the announcement states.
In connection with the macroeconomic projections that are published, the NBS emphasizes once again that every assessment and projection is necessarily based on certain assumptions that may or may not be realized and may deviate in both directions, so the outcome of any macroeconomic indicator may be both more favorable and less favorable than the assumption.
“For this reason, large parts of the reports of the National Bank of Serbia and every other central bank are devoted to risk analysis, so there is the concept of risk analysis and the concept of scenarios, and because of this, different scenarios are created and published, in order to indicate different possible outcomes to experts and the general public under various assumptions related to movements in the international environment that a small country like Serbia cannot influence”, NBS points out.
It is noted that Serbia cannot influence the economic growth of the euro zone, the inflation in those countries or the world prices of energy and primary products.
“What he can and must do is to choose reasonable and sufficiently conservative assumptions for the purposes of his projections based on the evaluations and projections of international institutions or on the basis of some other sources,” the announcement reads.
It is added that no central bank in the world “claims to have the ability to fully predict future developments, but does the same thing as the NBS – publicly publishes its macroeconomic projections and presents the assumptions on which the projections are based as transparently as possible.”
“Therefore, we regularly publish analyzes in which we show which factors contributed to the fact that the realization of economic indicators deviates from the projections and when it comes to more favorable and unfavorable outcomes than the projected ones”, notes the National Bank of Serbia.
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