The National Bank does not expect inflation to exceed five percent

According to the results of the January survey, the short-term and medium-term inflation expectations of the financial sector continue to be within the inflation target of the National Bank of Serbia of three (± 1.5 percent), the National Bank announced.

The NBS states that the short-term inflation expectations of the representatives of the financial sector continued to be around the level of four percent, and that according to the results of the Ipsos survey, the representatives of the financial sector expect inflation to reach 4.2 percent in January 2023.

At the same time, according to the results of the February poll by the Bloomberg agency, the inflation expectations of the financial sector for February next year are somewhat lower and amount to 4.0 percent.

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When it comes to inflation expectations of businessmen, according to the results of the Ipsos poll, they remained unchanged in January compared to the previous poll and amount to 6.0 percent.

However, the assessment of price pressures in terms of inputs and own final products, ie services, is lower than in the previous survey, which, according to the NBS, could indicate the easing of price pressures in the economy.

Inflation expectations for the two and three years ahead are lower in both the financial sector and the economy compared to the short-term and range from 3.0 to 3.5 percent, for the financial sector and from 4.5 to 5.0 percent in sector of the economy.

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These results of the survey indicate that both the financial sector and the economy perceive the current higher inflation as temporary, which is also the assessment of the National Bank, as well as most of the leading central banks in the world, according to the NBS.

It is emphasized that the anchoring of inflation expectations, which is based on the stability of the exchange rate, contributes to increasing the efficiency of monetary policy in maintaining low, stable and predictable inflation in the medium term, which is one of the necessary preconditions for sustainable economic growth, Politika reports.