Serbian central bank: Prices continue to drop faster than projected

NBS Governor Jorgovanka Tabakovic said inflation in April stood at five percent, and that, according to the latest NBS projections, inflation will return within the bounds of the target tolerance band of 3±1.5 percent most likely in May.

In the remainder of the year, we expect inflation to move around the 3 percent target midpoint as of next year and over the projection horizon, said Tabakovic.

The financial sector’s expectations confirm this as, according to the results of an April survey, they are almost on the target midpoint and measure 3.1 percent.

She added that there are risks, all of them global, that they mostly involve global relations and global increase in energy prices, as well as that she does not expect the materialization of these risks to have a major impact on inflation.

Still, there will be no lowering of the key policy rate for now, and therefore no lower interest rates in banks. For the time being, in view of the existing risks, the central bank has decided against rushing into premature monetary policy relaxation.