Jorgovanka Tabaković: Overview of recent monetary and macroeconomic trends in Serbia

Introductory speech by Dr Jorgovanka Tabaković, Governor of the National Bank of Serbia, at the presentation of the November Inflation Report, Belgrade, 15 November 2023.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Ladies and gentlemen, esteemed members of the press, dear colleagues,

Welcome to the presentation of the November Inflation Report.

Before we elaborate in more detail on the current macroeconomic developments and our new projections, I wish to highlight that, despite heightened uncertainty and external challenges, developments in many areas are either in line with or better than what we expected at the time of the previous Report. I here have in mind the following:

• Inflation declined to 8.5% in October, moving somewhat below our August expectations over the past months;
• Owing to a robust bank regulatory and macroprudential framework and moderate monetary tightening, financial stability has been preserved and the NPL share in total loans is close to a historical low;
• In Q3 GDP growth picked up to 3.5% y-o-y, exceeding our earlier expectations. In light of favourable developments, our GDP growth projection for the entire year is now around 2.5%;
• We have seen a major improvement of our external position – in the nine months of this year, the current account deficit measured only 1.6% of GDP, with FDI inflows exceeding it multiple times. As a result, FX reserves rose to a new record high of EUR 24.4 bn at end-October;
• The fiscal deficit will be lower than initially planned and will measure around 2.8% of GDP in 2023, thanks to better than planned revenues and reduced transfers to the energy sector, which will accelerate the downward trajectory of public debt.