The National Bank of Serbia published Governor Jorgovanka Tabaković’s address to the 32nd Kopaonik Business Forum, reviewing 2024 inflation developments and monetary and macroprudential measures and presenting the central bank’s February macroeconomic projections and risk assessment. The speech linked the return of inflation to the target band to the start of monetary easing, while setting out expectations for gradual disinflation during 2025 alongside stronger output growth. Inflation was brought back within the 3 ± 1.5% target range in May 2024 and stabilised at around 4.3% in the second half of the year, with the Governor citing food commodity price pressures linked to adverse weather conditions and elevated personal services price growth in many countries. The benchmark interest rate was cut three times in 2024 by a total of 75 basis points to 5.75%, alongside measures including a decision on a temporary limitation of interest rates on household loan agreements (to be regulated by law) and regulations to enable a state housing loan programme for young people; the non-performing loan ratio fell to 2.5% in December. The address also highlighted resilience metrics including a 0.1% appreciation of the dinar against the euro in 2024, net foreign exchange purchases of over EUR 2.7 billion, record foreign exchange reserves of EUR 29.3 billion and gold reserves of 48.7 tonnes, as well as 2024 gross domestic product growth of 3.9%, record foreign direct investment of over EUR 5.2 billion, and a fiscal deficit of 2% of GDP. The National Bank of Serbia expects year-on-year inflation to stay around the upper limit of the permitted deviation in the first quarter, then slow gradually and approach the central target value by end-2025, remaining around that level over the projection horizon. GDP growth is projected at 4.5% in 2025 and between 4% and 5% over the following two years, with 2027 growth closer to 5% in the year of the Expo exhibition; the baseline assumes domestic-demand-led growth and an investment share of GDP above 25% in the medium term. Risks cited include geopolitical tensions, protectionism and climate-related disruptions affecting commodity prices, structural productivity challenges in Europe, and labour market impacts from artificial intelligence, alongside demographic pressures; the Governor also reiterated the central bank’s focus on exchange-rate stability and ruled out negative interest rates in Serbia.

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