Inflation Movements in August 2017
According to the Serbian Statistical Office, consumer prices picked up by 0.2% in August. Monthly inflation was driven by a seasonal rise in prices of travel packages and fresh meat, while the strongest negative contribution came from falling prices of clothes and footwear and fresh fruits.
Y-o-y inflation fell to 2.5% in August, while core inflation (CPI excluding prices of food, energy, alcohol and cigarettes) also slowed down – to 1.5% y-o-y.
The drop in y-o-y inflation was expected and led by both the current movement in prices and the base effect, i.e. price movements in the same period last year. Namely, monthly inflation measured 0.9% in August 2016, mainly as a result of the meat price hikes which were higher than usual for the season. Given that such price increases expectedly did not repeat, August this year saw a smaller monthly rise in prices, which reflected also on a reduction in the y-o-y inflation rate. The base effect will also affect y-o-y inflation in September, which should return to the level close to the midpoint. As assessed by the NBS, y-o-y inflation will continue to move within the target tolerance band of 3.0%±1.5 pp thereafter.