Serbia: Central Bank stands pat in June
June 10, 2021
At its 10 June meeting, the Executive Board of the National Bank of Serbia left the key policy rate unchanged at its all-time low of 1.00%. This marked the sixth consecutive hold.
The decision was driven by the Bank’s assessment that prior monetary and fiscal policy measures have buttressed economic activity and will continue to do so. Moreover, a third stimulus package worth around 4.3% of GDP adopted by the government will provide further support. The economy has outperformed expectations since the beginning of the year according to the Bank, and it is forecast to continue growing in the period ahead, “largely as a result of the coordinated monetary and fiscal policy measures”. For the year as a whole, the Bank sees the economy growing 6.0% or more. Turning to inflation, higher price pressures in April are expected to have persisted in May, but the Bank considers these pressures to be transitionary—partly due to a low base effect.
Looked ahead, the Bank reiterated its commitment to continue supporting price and financial stability while fostering stronger economic and employment growth. It will continue keeping a close eye on factors that could impact price levels domestically and abroad.
The next meeting is scheduled for 8 July.
Author: Jan Lammersen, Economist