Serbia's c-bank holds policy rate at 6.5%

This decision was primarily determined by declining, yet still elevated, global inflationary pressures, the current medium-term inflation projection, as well as the present uncertainty of the international environment stemming from the evolution of energy and primary product prices, the central bank said in a statement.

The National Bank of Serbia (NBS) also left unchanged its deposit facility rate and lending facility rate, at 5.25% and 7.75%, respectively.

The NBS last changed its key rate in July, increasing it by 25 basis points to 6.5% to counter inflationary pressures.

The latest data published by the national statistical office showed that Serbia's consumer price growth slowed to 5.6% year-on-year in February, after easing to 6.4% the month before.

Despite weaker external demand, further progress was made in trade in goods with foreign countries, where, in the first two months of 2024, a year-on-year export growth of 3.2% was achieved. It was led by exports of the processing industry and agriculture, while at the same time, imports were lower by 1.3%, as a result of a drop in energy imports.

Considering the easing of global inflationary pressures and the gradual recovery of the eurozone, as well as the expected further acceleration of the realization of planned investment projects in the fields of transport, energy and communal infrastructure, the NBS executive board said it expects Serbia's gross domestic product (GDP) to grow in the range of 3% to 4% in 2024.

The central bank will hold its next rate-setting meeting on May 10.