The National Bank of Serbia reported that annual inflation stood at 2.2% in August, remaining below the 3% midpoint of its target. Inflation increased from July mainly because of elevated global oil prices and the prolonged energy shock, while consumer prices rose 0.5% month on month. Annual energy inflation accelerated to 11%, driven by higher petroleum product prices, and core inflation was 4.7%. By contrast, food and nonalcoholic beverage prices fell 6.3% from a year earlier, including declines of 12.7% for unprocessed food and 2.8% for processed food. The bank expects annual inflation to rise to around 4% in September, mainly because of a low base linked to last September's margin caps and continued increases in global energy and other commodity prices. Inflation is projected to remain within the target tolerance band over the next two years.