The National Bank of Serbia (NBS), referring to the data of the Republic Institute of Statistics, according to which the year-on-year April inflation was 15.1 percent, estimated that inflation slowed down in this month, which is in line with earlier estimates by the NBS that the peak of inflation should expect in the first trimester.
According to the central bank, similar trends are also observed in base inflation, with the fact that it is still significantly lower compared to overall inflation – in April, year-on-year base inflation slowed down to 11.1 percent, so that in this case it is also the peak reached in the first trimester.
They add that on a monthly basis, inflation in April amounted to 0.7 percent, which is almost twice as low as the average monthly rate recorded in the first quarter of 1.2 percent, and that the slowdown in the monthly dynamics of inflation was mainly due to the slower growth of food prices, primarily of processed food, which was 0.4 percent, which indicates that conditions on the market for basic foodstuffs have stabilized.
The prices of unprocessed food increased by 1.3 percent in April, driven by higher prices of vegetables, but their price increase was significantly slower than in the first quarter.
Compared to April 2022, the prices of food and non-alcoholic beverages increased by 23.1 percent, with year-on-year growth rates for both processed and unprocessed foods decelerating.
Growth of energy products 13.1 percent
When it comes to energy products, the NBS states that their prices were slightly reduced on a monthly basis in April, by 0.1 percent, which was largely determined by the further reduction in the prices of solid fuels, while the prices of oil derivatives on average, others month in a row, the rest unchanged.
On a year-on-year basis, the growth of energy prices in April amounted to 13.1 percent, with the contribution of the prices of oil derivatives moving into the negative zone after more than two years and contributing to the slowdown of overall year-on-year inflation.
The prices of products and service” within the base inflation, i.e. the consumer price index when food, energy, alcohol and cigarettes are excluded, recorded a monthly growth of 0.8 percent in April, which, according to the NBS, is in line with their trend since the beginning of the year.
Year-on-year, base inflation in April amounted to 11.1 percent, and its lower level than overall inflation is largely contributed by the preserved relative stability of the exchange rate in extremely uncertain global conditions.
Inflation will also decrease in the second quarter
At the National Bank, according to the current projection, they expect that inflation will remain on a downward path in the second quarter, with a significant drop in the second half of the year, and that entry into the target limits of three plus or minus 1.5 percent is expected in the middle of next year.
They also state that the previous tightening of monetary conditions, the reduction of cost pressures in agriculture and the processing industry, solving the problems with delays in global supply chains, returning the prices of international transport to the pre-crisis level, as well as the reduction of overall inflation in countries that are our largest foreign trade partners.
The new agricultural season, as well as the restrictive fiscal policy and somewhat slower growth of personal consumption compared to the total gross domestic product, should contribute to the slowdown of interannual inflation, the National Bank of Serbia reports.