Key policy rate kept unchanged
Central bank: nbs | Type: statement | Date: 2026-04-09

The NBS Executive Board decided in today's meeting to keep the key policy rate unchanged at 5.75%, including the deposit and lending facility rates (4.5% and 7.0%, respectively).When making the decision, the Executive Board was mainly guided by actual and expected inflation movements, as well as risks from the international environment which could impact inflation trajectory.In line with the Board's expectations, at the start of the year y-o-y inflation continued to move below the target midpoint, measuring 2.5% in February. The prices of food and non-alcoholic beverages continued to post a y-o-y fall, which equalled 0.7% in February. This was largely a result of the implementation of the Decree on Special Conditions for Trade in Certain Goods, which capped wholesale and retail trade margins in the period from September 2025 until March this year.The February projection assumed that trade margins would not return to their pre-Decree levels thanks to the adoption of systemic laws aiming to prevent unfair trading practices, but that inflation would move around 4% from September this year due to the low base from 2025 resulting from the implementation of the Decree. The projection also assumed no major rise in global prices of oil, other energy products and primary commodities. Flaring geopolitical tensions and the outbreak of the Middle East conflict have, however, given a strong upward push to oil prices in the past month and a half, reflecting on other energy prices as well. Given that Serbia is a net importer of energy, oil price growth will lead to higher petroleum product prices at home, but the effects on headline inflation will depend on the duration and intensity of the conflict. Current global developments and rising world oil prices may also affect the prices of container transport, mineral fertilisers, value chains, investment and consumer confidence, as well as the flows of goods and capital, which had already been under some pressure even before the outbreak of the latest crisis due to rising protectionism in leading world economies. When it comes to monetary policy decisions of leading central banks, the Middle East conflict has added to uncertainty regarding the outlooks for US and European inflation and economic activity, and made it more difficult to estimate what the Fed and the ECB's next move may be.Against such background, economic policymakers in Serbia are implementing coordinated measures aimed at preserving price stability and mitigating the adverse effects of external shocks. The government has already taken measures to limit the rise in petroleum product prices in the domestic market - it has banned the export of petroleum products and reduced excise duties on fuel, which should help contain second-round effects on other prices and thereby prevent a more pronounced build-up of inflationary pressures. The NBS continues to pursue a cautious monetary policy, while maintaining relative stability of the exchange rate. Should it assess that the increase in global oil prices is generating more pronounced second-round effects on other prices via inflation expectations, the NBS will respond using all available instruments. At the same time, the results of the March surveys indicate that short- and medium-term inflation expectations of the financial sector remain around the target midpoint and corporate sector expectations within the target band.As regards economic activity, following the challenges at the beginning of the year - primarily in the petroleum products manufacturing and chemical industry - conditions improved in February, largely owing to the services sector, as well as the restarting of production at the Pančevo Oil Refinery in late January. It is expected that securing a long-term sustainable solution for the smooth operations of the Oil Industry of Serbia (NIS) will provide additional support to economic growth over the remainder of the year. A positive contribution to GDP growth is expected from consumption and fixed investment, with investment projects under the "Leap into the Future - Serbia Expo 2027" programme playing a significant role, while in 2027 net exports are also projected to contribute positively, owing to "Expo". In the previous year, credit growth induced by favourable terms of borrowing acted as a strong tailwind to economic growth. Similar trends extended into 2026, in view of the lending acceleration to 16.4% y-o-y in February. Nevertheless, economic activity remains under the shadow of global uncertainty triggered by geopolitical and trade tensions and a rise in energy prices, which might negatively affect investment and consumer confidence and capital flows.The Executive Board will continue to monitor and analyse trends in the domestic and international markets, making future monetary policy decisions on a meeting-by-meeting basis, informed by the incoming data.Amid the significantly changed circumstances relative to the previous, February, inflation and GDP projections, the NBS currently weighs the sustainability of the current projections and develops different scenarios, to better grasp potential risks and ensure timely and adequate monetary policy response, should that be deemed necessary for the maintenance of medium-term price stability.The next rate-setting meeting is scheduled for 7 May 2026.

Governor's Office