Serbia's central bank holds key policy rate at 5.75 percent

The National Bank of Serbia (NBS) Executive Board decided on Thursday to hold the key policy rate steady at 5.75 percent. The deposit facility rate remains at 4.5 percent, and the lending facility rate stays at seven percent, the NBS announced.

This decision was primarily based on current and projected inflation, alongside potential risks from the global economic landscape that could influence inflation trends. The central bank noted that Serbia's real GDP growth in the first quarter of 2026 reached 3.2 percent, surpassing the initial estimate of three percent, according to data from the Republic Statistics Office.

Monthly indicators for April suggest positive momentum in industry, retail trade, and tourism, aligning with the NBS's May projection of three percent economic growth for 2026. Both domestic demand and net exports have driven GDP growth this year. Future economic activity is expected to benefit from investment projects under the "Leap into the Future – Serbia Expo 2027" program, with the Expo exhibition in 2027 providing an additional boost.

Economic activity is further supported by a significant increase in lending to corporations and households, which accelerated to 17.1 percent year-on-year in April. However, the NBS cautioned that global uncertainty, fueled by geopolitical tensions and rising energy prices, poses a risk. These factors could negatively affect investment, consumer confidence, and capital flows. In response, the NBS continues to implement a cautious monetary policy and maintain exchange rate stability, prepared to use all available instruments if global oil price increases lead to more pronounced second-round effects on inflation.