The National Bank of Serbia left its key policy rate unchanged at 5.75% at its July 2026 meeting, citing risks related to ongoing geopolitical tensions. Headline inflation accelerated to 3.5% in May, its highest level since mid-2025, but remained within the central bank’s target band of 3% ± 1.5%. The increase was largely driven by higher global oil prices, partially offset by government measures.
Economic activity picked up to 3.2% year-on-year in Q1 2026, up from 2.2%, supported mainly by the services sector and agriculture, with favorable developments also observed in manufacturing, retail, and tourism. The central bank expects inflation to start easing by September and to hover around the upper end of the target range, though it may temporarily move above the band in late 2026 or early 2027. At the same time, economic performance continues to be shaped by global uncertainty and volatile energy prices.
Looking ahead, monetary policy decisions will prioritize maintaining exchange rate stability, while closely monitoring inflation dynamics and responding, if needed, with all available instruments.
