- Decision
- Maintain
- Rate change
- 0 bps
- key policy rate
- 5.75%
The Executive Board of the National Bank of Serbia (NBS) left the reference rate unchanged at 5.75 percent on 10 April, with deposit and lending facility rates held at 4.5 percent and 7.0 percent, respectively, arguing that continued prudence is warranted even after last year’s sharp disinflation and the stabilisation of prices since mid-2024 amid still-elevated global commodity and trade-policy risks. Following three 25 bp cuts in 2024 that lowered the rate to its current level in September, the NBS has kept policy steady at its subsequent meetings. The corridor settings remain in place, and past easing is expected to keep domestic financial conditions supportive. Headline inflation hovered around the upper edge of the 3 ± 1.5 pp target band in January–February and is projected to stay near that level until mid-year before slowing toward the 3 percent midpoint in H2, helped by tight monetary conditions, an expected fall in fuel prices, a normal agricultural season and softer wage growth; core inflation should ease to about 5 percent from March. After 2024 GDP growth of 3.9 percent, activity in early 2025 softened—manufacturing stagnated while retail and tourism growth cooled—but the Board still sees an acceleration later in the year, supported by electric-vehicle and tyre production, new energy capacities, Expo 2027 infrastructure projects and roughly 10 percent credit growth. Lower imported inflation and ECB policy easing are seen as supportive, though heightened global protectionism, potential supply-chain disruptions and high food-commodity prices pose upside risks to inflation, while a cautious Federal Reserve stance adds external uncertainty. The Board reiterated it will decide on policy “meeting by meeting” to safeguard price and financial stability and sustain growth prospects.
Rate evolution
From June 2025 through September 2026, the National Bank of Serbia kept the key policy rate unchanged at 5.75%, extending a pause with no net change. The hold reflected actual and expected inflation and uncertainty, which eased in early autumn before worsening again, with mid-2025 decisions balancing weather- and drought-driven food inflation and an oil-price rise from Middle East tensions against softer domestic activity, while later decisions judged that the Government’s margin-capping decree, lower imported cost pressures, exchange-rate stability and earlier easing would contain inflation as lending and Serbia Expo 2027-related investment supported growth.
On 10 September 2026, the Executive Board again held the rate at 5.75%, citing actual and expected inflation and risks from the international environment. Year-on-year inflation remained within the 3±1.5% target band and stood at 1.9% in July, mainly because an exceptionally good harvest lowered fruit and vegetable prices, while significant second-round effects had not materialised and the economy proved more resilient than expected to the energy shock. The August projection envisaged inflation remaining within the target band over the next two years, moving around 4% from September 2026 and during 2027 before gradually declining, while core inflation stood at 4.5% in July.
Economic activity also exceeded expectations, with real gross domestic product growth accelerating to 3.8% year on year in the second quarter and prompting the National Bank of Serbia to raise its 2026 growth projection to 3.2%, while the Executive Board maintained a cautious stance as uncertainty over the Middle East conflict and oil prices remained elevated and reiterated that it would use all available instruments if stronger second-round effects lifted other prices through inflation expectations.