- Decision
- Maintain
- Rate change
- 0 bps
- key policy rate
- 5.75%
The Executive Board of the National Bank of Serbia (NBS) left the key policy rate at 5.75 percent at its 12 June meeting, also holding the deposit and lending facility rates at 4.50 percent and 7.00 percent, respectively, citing persistent global protectionist risks, volatile commodity markets and still-subdued domestic growth despite inflation remaining within the 3 ± 1.5 pp target band. After three 25 bp cuts in 2024 that lowered the rate to its current level in September, the NBS has kept policy unchanged throughout 2025. The corridor around the policy rate is unchanged and monetary conditions remain “tight,” with earlier easing still feeding through to credit, which is growing by more than 10 percent y/y. Headline inflation slowed to 3.8 percent y/y in May and core inflation to 4.6 percent; the bank expects headline inflation to stay near current levels until mid-year before easing toward the 3 percent midpoint by end-2025, helped by lower import prices, cheaper energy and an average new harvest. First-quarter GDP growth slipped to 2.0 percent y/y as external headwinds and domestic service-sector weakness offset a 2.4 percent rise in industrial output, but activity is projected to accelerate to 3.5 percent for 2025 on stronger automotive production, new energy capacity and Expo-related infrastructure spending. Global factors remain mixed: softer oil prices, record highs for cocoa and coffee, the European Central Bank’s continued accommodation and a more cautious U.S. Federal Reserve stance could sway capital flows to emerging markets. The Executive Board reaffirmed a meeting-by-meeting, data-dependent approach and pledged to safeguard financial stability and growth, with the next rate-setting session scheduled for 10 July.
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.