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

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

Welcome to the presentation of the August Inflation Report, where we will briefly present our view of macroeconomic developments, new macroeconomic projections and monetary policy decisions adopted in the period since the previous Report.

The y-o-y inflation continued to slow down during April and May, consistent with our expectations outlined in the previous Report. However, it accelerated again in June, to 4.6%, and then further to 4.9% in July, due to the rise in unprocessed food prices and the increase in global oil prices following the outbreak of the conflict between Israel and Iran. Although I will elaborate on food prices later in my address, I would like to begin by highlighting the movement of fruit prices in recent months, considering their impact on headline inflation. Influenced by adverse weather conditions (first, frost in the spring, followed by extremely hot and dry weather in June), the yields of many fruits turned out considerably lower than usual, which caused a notable increase in their prices. Given that adverse weather conditions are increasingly affecting agricultural seasons, the NBS has undertaken several activities in order to have this issue addressed in a systematic manner. We have had discussions with all relevant stakeholders. We have also approached the Association of Serbian Insurers to explore the possibility for making insurance, as a form of protection, more accessible to agricultural producers.