NBS is not worried about INFLATION, key policy rate to remain at 1%

The Executive Board of the National Bank of Serbia has decided to keep the key policy rate at the level of one percent.

Primarily, the Executive Board had in mind that the effects of the adopted monetary and fiscal measures could be expected in the forthcoming period as well, and that, based on this, the conditions for funding the economy and citizens would remain favourable, and this in turn would contribute to the growth of available income.

Considering the inflation rates, the Executive Board highlighted that since April, they have been around the central value of the target (3 ± 1.5 percent). As in the case of other countries in the region, the higher level of year-on-year inflation compared to the previous trimester is predominantly caused by the low base from the same period last year for petroleum prices, as well as higher cost pressures, due to rising global prices of petroleum and other primary products, according to the NBS’ press release.

At the same time, they point out that there are no significant inflationary pressures in terms of demand. The absence of significant inflationary pressures is indicated by low and stable core inflation (around 2%), as well as short- and medium-term inflation expectations, which, in the case of the financial sector are around the central value of the target, and in the case of the economy are lower.

The Executive Board expects that inflation will continue to fluctuate within the target range in the coming period.

New strains of the virus will continue to pose risks to global economic growth, and so will occasional supply chain disruptions and labour market imbalances, since these increase production costs. The growth of our most important economic partner, the euro zone, has been accelerating since April, and this is why its projections for this year and the next one have been revised upwards, as added in the press release.

Izvor: BIZlife

Foto: BIZLife