The National Bank of Serbia lowered its key policy rate by 25 bps to 2.75 percent at its July 11th 2019 meeting, surprising markets who expected no changes. It is the first rate cut so far this year, bringing borrowing cost to its lowest on record. Policymakers said that inflation is expected to move to the lower bound of the target range (3.0±1.5%) by the end of this year and next year. The Committee projects that the economic growth will be driven by domestic demand, such as investment and consumption, and foreign direct investments, which will contribute to output growth and export capacities. Interest Rate in Serbia averaged 8.80 percent from 2006 until 2019, reaching an all time high of 18 percent in October of 2006 and a record low of 2.75 percent in July of 2019.
Interest Rate in Serbia is expected to be 3.00 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Serbia to stand at 3.00 in 12 months time. In the long-term, the Serbia Interest Rate is projected to trend around 3.00 percent in 2020, according to our econometric models.