February 14 (SeeNews) - Serbia's annual inflation is expected to return to the targeted range of 1.5% to 4.5% by the middle of 2024, central bank governor Jorgovanka Tabakovic said on Wednesday.
Serbia concluded 2023 with an annual inflation rate of 7.6%, marking a decrease from 15.1% at the end of 2022. Throughout 2023, consumer prices rose by an average of 12.1% compared to the previous year.
"Under our new projection, [inflation] will most probably retreat within the target band of 3±1.5% by mid-2024, approach the target midpoint late in the year and hover around that level over the medium term," Tabakovic said in her introductory speech on the presentation of the central bank's February Inflation Report.
She noted the inflation slowdown will come as a result of past monetary tightening, softer global cost-push pressures, slowing imported inflation, subdued external demand and the expected continued slide in inflation expectations.
"The new inflation projection is slightly lower than the November projection due to lower global prices of primary commodities and a faster decline in inflation expectations than we projected in November," Tabakovic stated, adding that at present, not only the medium-term but also the short-term inflation expectations of the financial sector are within the target band, while those of the corporate sector are on a decline as well.
In its Inflation Report issued in November, the central bank had said it expected average annual inflation of 4.6% for 2024, down from the projected 12.5% for 2023.
Earlier in February, the central bank kept its repo rate unchanged at 6.5%, reflecting the further reduction of global inflationary pressures, as well as the downward trajectory of domestic inflation. The central bank last changed its key rate in July, increasing it by 25 basis points to 6.5% to counter inflationary pressures.