Serbia: Business confidence inches down in September but remains elevated
Consumer prices fell 0.5% month-on-month in September, down from the 0.1% drop recorded in August. While the print marked the second consecutive fall in prices, it was also the steepest drop since September 2019. Moreover, the result reflected a broad-based decrease in prices, with food and non-alcoholic beverages; alcoholic beverages and tobacco; clothing and footwear; and recreation and culture all becoming less costly.
Inflation, meanwhile, inched down to 1.8% in September from 1.9% in August, but annual average inflation was stable at August’s 1.5%. Lastly, harmonized inflation edged down from 1.9% in August to 1.8% in September.
Looking ahead, in the final months of the year inflation is expected to fluctuate around its current level before picking up some pace next year on an expected economic recovery. However, the balance of risk is tilted to downside amid the seeming onset of a third wave of coronavirus cases in early October, which could derail recently regained economic momentum and depress price levels, spilling over into early next year. However, upward price pressures in 2021 could result from a possible greater increase in electricity tariffs compared to this year, which would drive up energy inflation.