NBS Using Artificial Intelligence to Predict Inflation – Estimate Says That It Decelerated to 5.5% in February

The estimate of the National Bank of Serbia (NBS) is that the inflation slowed down in February, to 5.5% y-o-y, NBS Governor Jorgovanka Tabakovic said at the Kopaonik Business Forum.

– In January, y-o-y inflation dropped further, to 6.4%, fully consistent with our nowcast model, supported by artificial intelligence. According to our estimates, inflation decelerated further in February, to 5.5% y-o-y – said Tabakovic.

According to her, inflation rise in Serbia over the past three years was mostly driven by food and energy prices – which account for 53–75% of y-o-y inflation and are crucially affected by global factors.

– In comparable Central European countries, inflation spiraled up to highs unseen in decades, though peaking at different points in time. In Serbia, inflation peak was reached somewhat later and was generally lower than in those countries, so the high base effect from the same period in 2022 was also comparatively lower.

Serbia’s inflation peaking later compared to other countries may be explained by the fact that in the first wave of the energy crisis “our state assumed the major part of the cost burden,” according to the NBS website.

– It thus reduced uncertainty in the domestic market and mitigated the first wave of the crisis, while in the majority of other countries, the bulk of these price adjustments were made abruptly already in 2022. Also, core inflation, excluding the prices of food and energy and measuring the impact of monetary policy, edged up less in Serbia than in the majority of comparable Central European countries over the past three years – she pointed out.

Narodna banka Srbije Beograd

National Bank of Serbia

NBS

Jorgovanka Tabaković

Kopaonik Business Forum

inflation

nowcast model

projecting inflation

artificial intelligence