Serbia holds at 5.75% and expects inflation near 4% from September
Serguey Asael Shinder2 min readThe National Bank of Serbia (NBS) Executive Board kept its key policy rate at 5.75% on 8 October, and left the deposit facility at 4.5% and the lending facility at 7.0%. The rate has been unchanged at every meeting this year.
Inflation. Year-on-year inflation rose to 2.2% in August from 1.9% in July, which the NBS attributes mainly to the persisting energy shock and higher oil prices. More important is what comes next: a low base from last year's decree capping trade margins means the Board expects inflation to hover around 4% from September. Its August projection still has inflation inside the target tolerance band for the next two years, but the Board now says risks are tilted upward because of the prolonged energy shock and faster-than-expected rises in other commodity prices.
The energy picture. The statement notes that oil prices "resumed their upward trend" over the summer, with gas and electricity rising too. So far, cuts in excise duties on petroleum products and the use of energy reserves have softened the effect on domestic fuel prices. If the Middle East conflict persists or tensions escalate, the NBS warns, effects could spill into production and transport costs, supply chains, capital flows and inflation — a particular risk for "a small and open economy heavily dependent on energy imports".
Growth. Output was 3.5% higher in the first half than a year earlier, led by services and private consumption; summer indicators were dampened in industry by drought and low water levels. The Board expects growth of at least 3.2% this year and about 4.5% next year, driven by domestic demand and infrastructure projects.
The reaction function. The NBS describes its stance as cautious, with relative exchange-rate stability. Decisions will follow incoming data, and "if assessed that the increase in global oil prices has stronger second-round effects on other prices through inflation expectations, the NBS will respond using all available instruments." That is a conditional tightening bias: the trigger is not headline inflation reaching 4%, which the Board expects, but evidence that it spreads. The next meetings are on 12 November and 10 December.
Source: National Bank of Serbia, "Key policy rate kept unchanged", 8 October 2026 — https://www.nbs.rs/en/scripts/showcontent/index.html?id=21768&konverzija=yes