Energy Prices and Their Direct Effect on Inflation in Serbia during 2016-2025
Keywords:
inflation, consumer prices, energy prices, electricity, Serbia
Abstract
Over the past fifteen years, inflation in Serbia has generally remained low and within the NBS target range, except during the period from 2021 to 2023. The aim of this paper is to assess the direct contribution of energy prices to inflation in Serbia. Energy accounts for approximately 16% of the consumer basket, and fluctuations in energy prices influence non-core inflation, which includes price growth that is prone to significant short-term oscillations due to supply shocks. The paper examines the price trends of electricity, gas, solid fuels, heat energy, and fuel for passenger vehicles, as well as the effects of changes in these prices on overall inflation in Serbia from 2016 to 2025. Throughout most of this period, the direct contribution of energy prices to inflation was less than one percentage point a year, representing between 15% and 30% of the total contribution of all components of the consumer basket. The largest impact on inflation was due to rising electricity prices, followed by increases in fuel prices for passenger vehicles and solid fuels.
References
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Batas Bjelić, I., & Molnar, D. (2021). Full Costs of Electricity Produced from Lignite in Serbia. Energija, ekonomija, ekologija, XXIII(4), 38-44. https://doi.org/10.46793/EEE21-4.38B.
Dživdžanović, D. (2025). Examining Cheapflation in Serbia in the 2022-2024 Period. Working Papers Bulletin VIII – March 2025, National Bank of Serbia.
Economics Institute & Chamber of Commerce and Industry of Serbia. (2025). Macroeconomic Analyses and Trends, No. 361. Available at: https://api.pks.rs/storage/assets/MAT%20361%202025-02.pdf
Global Petrol Prices. (2025). Database. Retrieved from: https://srb.globalpetrolprices.com/Serbia/diesel_prices/.
Government of the Republic of Serbia. (2022). Odluka o privremenoj zabrani izvoza određenih drvnih sortimenata od bitne važnosti za Republiku Srbiju. "Sl. glasnik RS", br. 87/2022, 99/2022 i 121/2022.
Government of the Republic of Serbia. (2025). Uredba o posebnim uslovima za obavljanje trgovine za određenu vrstu robe. "Sl. glasnik RS", br. 76/2025, 78/2025, 93/2025, 106/2025 i 10/2026.
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Ivković, A., Miletić, M., & Jakovljević., S. (2022). Estimation of the Impact of Global and Domestic Factors on Inflation in Serbia. Working Papers Bulletin II – March 2022, National Bank of Serbia.
Martin, V. (2020). Development of Inflation Expectations in Serbia and a Comparative Analysis. Journal of Central Banking Theory and Practice, 9(1), 61-79. https://doi.org/10.2478/jcbtp-2020-0004.
Mehmedi, B.R. (2024). The Effects of Energy Prices on the Inflation Rate of Western Balkan Countries. Trends in Economics, Finance and Management Journal, 6(1), 13-22. https://doi.org//10.69648/NHXH4714.
Miletić, M., Cerović, D., & Tomin, A. (2023). Impact of Global Supply Disruptions and Energy Prices on Inflation in European Countries. Working Papers Bulletin V – September 2023, National Bank of Serbia.
Minasyan, G., Ozturk, E., Pinat, M., Wang, M., & Zhu, Z. (2023). Inflation Dynamics in the Western Balkans. IMF Working Paper No. WP/23/49.
Mladenović, Z., Arsić, M., & Nojković, A. (2024). Econometric Analysis of Energy Prices on Inflation in Serbia. The 51st Symposium on Operational Research – SYM-OP-IS 2024 Conference Proceedings. Tara, September 16-19, 2024. https://doi.org/10.24867/SYMOPIS-2024-51-022.
Molnar, D. (2022). Slučaj Covid-19: Završni račun? Asocijacija „BANAT-INFO” i GNB „Žarko Zrenjanin“, Zrenjanin.
Nikolić, I., & Filipović, S. (2020). How Energy Transition Will Affect Electricity Prices in Serbia? Industrija, 48(1), 47-60.
OECD. (2025). Energy Prices and Subsidies in the Western Balkans: Reforms for a Fair and Green Future. OECD Development Pathways, OECD Publishing, Paris. https://doi.org/10.1787/082ea26a-en.
Praščević, A., & Ješić, M. (2022). Energy Prices as Significant Supply-Side Shocks: the Case of the Former SFRY and Višegrad Group Member Countries. Economic Horizons, 24(2), 129-149. https://doi:10.5937/ekonhor2202139P.
Srbijagas. (2023). Izveštaj o poslovanju JP “Srbijagas” Novi Sad u periodu 01.01.-31.12.2022. Available at: https://www.srbijagas.com/wp-content/uploads/2025/05/Izvestaj-o-poslovanju-JP-Srbijagas-za-2022.g.pdf.
Statistical Office of the Republic of Serbia. (2025). Database. Retrieved from: https://data.stat.gov.rs/?caller=SDDB&languageCode=sr-Latn.
United Nations. (2018). Classification of Individual Consumption According to Purpose (COICOP) 2018. Statistical Papers, Series M, No. 99. Department of Economic and Social Affairs, Statistics Division.
Wehrhöfer, N. (2023). Energy Prices and Inflation Expectations: Evidence from Households and Firms. Deutsche Bundesbank, Discussion Paper No. 28/2023.