The National Bank of Serbia’s Executive Board raised its key policy rate by 25 basis points to 6% to prevent significant second-round effects from the energy shock and preserve medium-term price stability, following holds at 5.75% from November 2025 through October 2026. It also raised the deposit and lending facility rates to 4.75% and 7.25%, respectively. Inflation increased in September, primarily reflecting base effects on food and household cleaning product prices, alongside higher fuel prices. The central bank expects inflation to exceed the upper bound of its 3±1.5% target band in 2027 before returning within the band by year-end. It raised its growth outlook for 2026, citing stronger-than-expected economic resilience and agricultural production, but lowered its 2027 forecast because of a higher comparison base, geopolitical tensions and rising energy prices. Prolonged conflict in the Middle East and persistently elevated oil, natural gas and electricity prices are increasing the risk of broader spillovers into production costs, inflation expectations, wages and other prices. Future policy decisions will depend on incoming data, with price and financial stability remaining priorities while supporting economic activity and employment.
National Bank of Serbia raises key policy rate by 25 basis points to 6%
The National Bank of Serbia raised its key policy rate by 25 basis points to 6% to curb second-round effects from the energy shock, alongside increases in deposit and lending facility rates to 4.75% and 7.25%, respectively. It expects inflation to exceed the upper bound of its 3±1.5% target band in 2027 before returning within the band by year-end.