Serbia Interest Rate

The National Bank of Serbia (NBS) held its benchmark interest rate steady at 5.75% during its May 2025 meeting, maintaining a cautious monetary policy stance amid easing inflationary pressures and continued uncertainty surrounding the economic outlook. Inflation slowed to 4.4% in March and is projected to decline further, approaching the 3% target midpoint by year-end. This outlook is supported by falling global commodity prices, moderating core inflation, and improved agricultural conditions. However, downside risks remain due to global market volatility, trade policy uncertainty, and persistently high food input costs. Serbia’s GDP grew by 2.0% year-on-year in the first quarter of 2025, missing expectations as weak external demand and domestic disruptions weighed on performance. Nonetheless, economic activity is expected to gain momentum later in the year, driven by a rebound in the automotive sector, new energy capacity additions, and infrastructure investments tied to Expo 2027.