Lowest inflation in past 40 years

BELGRADE - The increase of consumer prices in Serbia totalled 1.7 percent in 2014, which constitutes the lowest inflation rate in the past four decades, the analysis drafted by the Ministry of Trade shows.

Consumer prices recorded a several times lower increase intensity in 2014 than in all the years when inflation was measured by the increase of consumer prices, with the exception of 2013, the analysis states.

The increase of consumer price in 2014 was considerably below the projected inflation rate established in the Fiscal Strategy for 2014 with projections for 2015 and 2016 (5.5 percent) and the target inflation for the period from 2012 to 2014 as set at 4 percent plus or minus 1.5 percent in the Memorandum of the National Bank of Serbia.

The strongest impact on the inflation rate came from prices of food and non-alcoholic beverages since the prices of unprocessed food increased by 5.4 percent due to climate conditions, which affected the overall increase of food prices by 2.5 percent.

The lower VAT rate for main food products increased from 8 to 10 percent and regular adjustment of the dinar-denominated figures of excise duty for coffee and alcoholic beverages was also carried out.

The increase of VAT from 8 to 10 percent was recorded with medicines, artificial fertilizers and plant protection substances, textbooks, daily papers, accommodation services, tickets for cinema and theatre performances, natural gas, utility services and passenger fares in city transport.

The increase did not exert major impact on prices of all products and services.

A considerable impact on the increase of inflation was also recorded with housing prices such as the prices of water, electricity, gas and other fuels...