Serbia’s annual inflation rate slowed to 2.7 per cent in June 2026, down from 3.5 per cent in May, giving the National Bank of Serbia a more comfortable headline indicator while exposing a widening difference between food prices and the cost of energy, transport and household services.
Consumer prices increased by 0.2 per cent month on month. The main disinflationary contribution came from food and non-alcoholic beverages, where prices were 3.7 per cent lower than a year earlier. Because this category represents 31.64 per cent of Serbia’s consumer basket, the decline was sufficient to offset continued increases across several other large expenditure groups.
The underlying cost picture is less benign. Housing, water, electricity, gas and other fuels rose 9.5 per cent year on year, while transport prices increased 7.7 per cent. These categories account for 13.70 per cent and 12.74 per cent, respectively, of the consumer basket. Inflation is therefore being reduced by cheaper food rather than a broad easing of household and business expenses.
This distinction matters for monetary policy. The National Bank of Serbia has kept its key policy rate at 5.75 per cent. June’s result reduces the immediate case for another increase, but it does not create much room for aggressive monetary easing. Energy prices continue to influence production costs, transport tariffs and inflation expectations, while Serbia’s exposure to imported oil leaves the domestic price outlook vulnerable to geopolitical disruption.
The central bank expects inflation to move towards the upper boundary of its 1.5–4.5 per cent target range later in 2026, partly because of base effects. A more sustainable return inside the range is expected by the middle of 2027.
Lower food prices should support disposable income, particularly among lower-income households, but the benefit is being diluted by utility and mobility costs. Businesses in construction, manufacturing, agriculture, logistics and retail continue to face input-price pressures that are not visible in the headline inflation rate.
The hospitality sector provides a similar signal. Restaurant and hotel prices rose 5.6 per cent year on year in June, with restaurant food increasing by 7.2 per cent, alcoholic drinks by 6.8 per cent and non-alcoholic beverages by 6.4 per cent. Accommodation prices declined by 1.8 per cent, suggesting that operators have greater pricing power in food and beverages than in hotel rooms.
Serbia has achieved a meaningful reduction in headline inflation, but the composition remains important for investment and credit decisions. Energy-intensive businesses and transport-dependent sectors are still operating in a cost environment considerably less favourable than the national inflation figure suggests.
