NBS: 75% of Prices Still Above Pre-Cap Levels

Prices for about 75 percent of the products that were covered by the Regulation on Limiting Trade Margins had not returned, as of July, to the levels seen before the regulation took effect. That is the finding of an analysis by the National Bank of Serbia (NBS), published alongside its Inflation Report, which for the first time measured what happened to prices after the measure expired.

The regulation capped wholesale and retail margins and was in force for six months, from September 2025 through the end of February 2026. The NBS states: “Prices of about 75 percent of the products covered by the Regulation, as of July, had not reached the levels recorded before it was introduced.”

The central bank looked in more detail at industrial food products and household chemicals, since parts of the regulation, particularly those concerning invoice prices, changed during its implementation, while the prices of fruit and vegetables depend on the season.

A drop during the regulation, a small further drop afterward

“Cumulatively, the prices of these products fell by 5.2 percent during the period the Regulation was in force, and by a further 1.1 percent over the following five months,” the NBS states.

So retailers did not raise prices back to where they were once the measure expired. Instead, they lowered them further on average, even if only slightly. Excluding fruit and vegetables, other food products became 4.3 percent cheaper while the regulation was in force, but rose by one percent in the five months after it expired.

Over the entire period tracked, from August 2025 to July 2026, cereals and pasta became 10 percent cheaper. Confectionery, fresh meat and other food products dropped in price by about nine percent, while non-food products fell 2.4 percent. Bucking that trend, bread became more expensive, in February while the regulation was still in force, and soft drinks recorded a minimal price increase.

The effect also showed up in inflation figures: the drop in prices of industrial food products more than doubled between March, when the regulation expired, and July, from 1.2 to 2.7 percent year on year. Their negative contribution to overall inflation grew from 0.3 percentage points in March to 0.7 percentage points in July. For household chemicals and cosmetics, the annual price drop eased, from 3.5 percent in March to 2.2 percent in July, though those prices remain well below their August 2025 levels.

The broader picture points the same way: year on year inflation fell to 1.9 percent in July, driven mostly by unprocessed food prices, which were 12.9 percent lower thanks to a strong agricultural season.

Three new laws replace the regulation

The NBS assesses that the risk of margins returning to their old levels has been significantly reduced by a new set of trade laws, rolled out gradually from May to August 2026. The central bank expects the biggest effect from the Law on Trading Practices for Certain Types of Products, aligned with European Union regulations, which is meant to prevent retail chains from abusing their bargaining power over producers. The Commission for the Protection of Competition, which enforces that law, has already issued guidance listing 14 unfair trading practices.

Starting September 1, retailers with annual turnover above three billion dinars will also be required to publish their price lists online every day, separately for each store. This outlet reported in early August that the NBS was preparing an artificial intelligence model to track prices, and that publicly available daily price lists would be what finally makes it possible to properly check retailers’ behavior.

Minister of Internal and Foreign Trade Jagoda Lazarevic said at the presentation of the report that it is still too early to talk about the full effects of the three new laws, since not all of their provisions have taken effect yet. The amended Law on Trade has applied since May, the Law on Consumer Protection since August, and the requirement to publish daily price lists only takes effect September 1.

“We gave four months for adjustment, and it is only from this fall, once the law starts to apply and once retailers, suppliers and everyone in the chain have changed their contracts, that we will see the real effect,” Lazarevic said, adding that there had been strong pressure and lobbying to delay the law’s implementation.

NBS Governor Jorgovanka Tabakovic said that continued enforcement of the laws and monitoring of unfair business practices should bring further order to the market. At the same presentation of the Inflation Report, Tabakovic also announced a revised gross domestic product growth projection for 2026, raised from 3.0 to 3.2 percent, while stating that inflation is expected to stay within the target range of three percent, with a permitted deviation of 1.5 percentage points in either direction.