The National Bank of Serbia presented its August 2026 Inflation Report, lowering its average inflation forecast for 2026 by 0.4 percentage points to 3.2% and slightly raising its GDP growth projection to 3.2%. Inflation fell to 1.9% in July, primarily because of lower fruit and vegetable prices, and is now expected to remain within the target tolerance band throughout the projection horizon. Average inflation is projected at 4.3% in 2027. GDP growth accelerated to 3.6% year on year in the second quarter, supported by services, manufacturing, construction and agriculture. The 2027 growth forecast remains 4.5%, with Expo-related activity expected to support the acceleration. The projected 2026 current account deficit was reduced to around 4% of GDP after the first-half deficit contracted 30.5% year on year to 3.1% of GDP. The central bank kept its key policy rate at 5.75% after the previous report, citing geopolitical tensions, volatile energy prices and risks of renewed global inflation. Financial stability indicators remained strong, with nonperforming loans reaching a record low of 2% in June and foreign exchange reserves rising to EUR 30.5 billion at the end of July.
2026-08-19National Bank of Serbia
National Bank of Serbia cuts 2026 inflation forecast to 3.2%, lifts GDP growth outlook and holds policy rate at 5.75%
The National Bank of Serbia lowered its 2026 average inflation forecast to 3.2%, raised its GDP growth projection to 3.2% and expects inflation to remain within the target tolerance band. It kept the key policy rate at 5.75% amid geopolitical and energy-price risks. The projected current account deficit was reduced to around 4% of GDP.