The slowdown in year-on-year inflation to 14.8 percent in May is in line with earlier estimates by the National Bank of Serbia, the National Bank of Serbia said, adding that core inflation, after excluding the prices of food, energy, alcohol and cigarettes, slowed even more to 10.4 percent in May.
“When it comes to monthly inflation, it amounted to 0.9 percent in May, which is slower than the average monthly inflation in the period January-April (1.1 percent). The monthly dynamics of inflation growth were marked by previously announced increases in the price of electricity and gas, as well as the increase in the prices of unprocessed food. The lower prices of oil products and services worked in the opposite direction,” the NBS press release states.
Prices of unprocessed food rose by 2.9 percent in May, led by higher prices of vegetables and meat. The increase in processed food prices in May was 0.6 percent and was significantly lower than the average performance during the first quarter, indicating that cost pressures in the market for basic foodstuffs are likely to have eased.
Observed in relation to May 2022, the prices of food and non-alcoholic beverages increased by 23.2 percent.
Energy prices, due to the increase in electricity and gas prices, rose by 1.5 percent on a monthly basis. The increase in energy prices was mitigated by lower prices of oil derivatives and further decline in solid fuel prices.
On a year-on-year basis, the growth of energy prices in May was lower than the growth of total inflation and amounted to 12.5 percent, while the prices of oil derivatives continued to contribute to the slowdown of total year-on-year inflation, according to the central bank.
Compared to April, base inflation increased by 0.4 percent, which, as stated, is the lowest monthly rate since the beginning of the year. This was mainly due to the lower prices of services.
“According to the current projection, we expect inflation to continue moving on a downward path, with a significant drop in the second half of the current year.” Inflation is expected to reach the goal of three percent plus or minus 1.5 percent in the middle of 2024.”
