National Bank of Serbia research confirms cheapflation in Serbia and explains post-pandemic inflation terminology

The National Bank of Serbia published a new edition of its “It is useful to know” column explaining inflation and several post-pandemic terms that describe how inflation can be driven or masked through firms’ pricing and product strategies, alongside findings from its own work on “cheapflation” in Serbia. In the column, Dragan Dživdžanovic outlines concepts such as “greedflation” and “excuseflation”, describing the view that inflation was amplified by rising profit margins and by price increases that exceeded cost growth, and notes that institutions including US Federal Reserve branches, the European Central Bank and the International Monetary Fund have pointed to this dynamic in the US and euro area. He also discusses how standard inflation measurement via the consumer price index can miss non-price adjustments, including “shrinkflation” (reduced quantities) and “skimpflation” (reduced quality or availability). On “cheapflation”, the National Bank of Serbia reports it tested the phenomenon in Serbia from the beginning of 2022 to the end of 2024 using 58 processed food and beverage products and found the cheapest brands rose by about 40% over three years, versus about 35% on average for the most expensive brands; the column links possible drivers to low food-demand price elasticity, substitution into cheaper brands, and market-structure imperfections that can facilitate more-than-full cost pass-through, and highlights distributional effects and potential impacts on inflation perceptions and expectations.