In June, Serbia’s year-on-year inflation stood at 3.8 percent, with a marginal monthly increase of 0.1 percent, reported by the Republic Institute of Statistics. Compared to December 2023, consumer prices rose by an average of 2.3 percent. Amid mixed signals from Western Balkan countries, the question looms whether inflation is a thing of the past, especially in the context of global trends showing a decline.
During June, prices rose notably for recreation and culture (1.9 percent), clothing and footwear (0.8 percent), restaurant and hotel services (0.7 percent), healthcare (0.4 percent), alcoholic beverages and tobacco (0.3 percent), and housing, water, electricity, gas, and other fuels, as well as education (each by 0.1 percent). Conversely, transport costs decreased by 1.3 percent, and communications saw a minor decrease of 0.1 percent.
In May, year-on-year inflation had slowed to 4.5 percent, aligning with projections by the National Bank of Serbia (NBS), which aims within the target deviation range of three percent, plus or minus 1.5 percent.
Global trends indicate a continued decrease in inflation throughout 2024, as highlighted by the Quarterly Survey of Economic Experts (EES) from the IFO Institute and the Institute for Swiss Economic Policy for the first quarter. Experts foresee a median global inflation rate of 4.6 percent for 2024, projected to decline further to 4.4 percent in 2025 and 4 percent by 2027. In Western Europe, inflation is anticipated to be the lowest at 2.8 percent in 2024, followed by North America and Northern Europe with rates ranging between 3.1 and 3.7 percent. Eastern Europe is expected to experience higher inflation at seven percent, while Southern Europe may see 4.3 percent inflation.
Addressing regional perspectives, Irena Radović, Governor of the Central Bank of Montenegro, noted a downward trend in inflation but emphasized ongoing challenges, particularly energy and food price increases and geopolitical factors affecting the economy. Radović stressed the importance of optimism and responsible policies, underscoring Montenegro’s controlled inflation and aspirations to join the Eurozone soon.
Similarly, Jasmina Selimović, Governor of the Central Bank of Bosnia and Herzegovina, acknowledged the persistent challenge of inflation, describing it as a demanding race to achieve target levels. Selimović highlighted geopolitical risks as critical factors influencing inflation dynamics, stressing the need for vigilant attention to these risks in both EU countries and the region.
Overall, the outlook reflects a complex economic landscape where managing inflation remains pivotal amidst global and regional economic dynamics and uncertainties.
