NBS: Key Policy Rate Kept at 1.25%

After considering current macroeconomic trends and the overall outlook at its meeting today, the NBS Executive Board decided to keep the key policy rate at 1.25%. In making the above decision, the Executive Board was guided primarily by the achieved and expected effects of past monetary policy measures aimed at mitigating the negative impact of the pandemic and encouraging economic growth, the NBS says.

– It is quite certain that the GDP outcome in 2020 as a whole will be better than the initially projected -1.5%. Under the new projection, the GDP drop will measure around 1% with risks tilted to the upside, and this will be one of the best outcomes in Europe. Industry and retail trade have already reached pre-crisis levels and exports are on the path of normalization. The revised GDP projection for 2020 also reflects improved performance of construction and agriculture – the NBS says.

Favorable prospects are further confirmed by the FDI inflow, which remained solid in the face of the pandemic and the economic slowdown of our key foreign trade partners and more than sufficient to cover the current account deficit.

Narodna banka Srbije Beograd

National Bank of Serbia

key policy rate

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