Representatives of Financial Sector Expect Inflation to Be at 7.5% in a Year

Representatives of the financial sector expect the inflation to amount to 7.5% in May 2024, which is the first reduced expectation after months of being at 8%, as shown by the results of a survey carried out by the Ipsos agency. The lower inflation expectations compared to the previous survey were also recorded according to the results of the June survey by Bloomberg, according to which the inflation for a year ahead is 6.8% (7.5% in May), according to the website of the National Bank of Serbia.

The short-term inflation expectations of the representatives of the economy (the year-ahead period) since the beginning of the year have been at 10%, which is also the expectation recorded in the May survey.

– When it comes to inflation expectations for two to three years ahead, for both the financial sector and the economy, they are lower than short-term expectation. The expectations of financial sector representatives for two years ahead are lowered from 5% in April to 4.5% in May, whereas a reduction is also recorded in expectations for three years ahead (from 4% in April to 3.8% in May). This way, for the first time after seven months, the medium-term expectations for both observed periods have returned to the NBS target bands. As for the medium-term expectations of the representatives of the economy, they haven’t changed and, for the period of two years ahead, they amount to 7%, whereas for the period of three years ahead, they are at 5%, according to the NBS website.

The results of the survey which pertain to two and three years ahead also point to the fact that both the financial sector and the economy expect the inflation pressures to loosen in the coming period and the inflation to gradually return within the target band in the medium term.

Narodna banka Srbije Beograd

National Bank of Serbia

NBS

inflation

expected inflation

inflation expectations

short term inflation