Serbia: Electricity, Cevapi Drive Consumer Price Growth
Serbia's Statistical Office reports consumer prices rose 2.9% year on year in the first half of 2026, with electricity, medicine and restaurant cevapi accounting for the largest individual gains.
Consumer prices in Serbia rose 2.9% in the first half of 2026 compared with the same period a year earlier, according to the “Trends” report for the second quarter, published by the Statistical Office of the Republic of Serbia (RZS).
The biggest contributor to that overall increase was the housing, water, electricity, gas and other fuels group, responsible for 42.9% of the total price growth. Among individual products and services, electricity topped the list with 17% of the overall price increase. It was followed by vehicle fuels and lubricants at 10.3%, tobacco at 9.3%, medicine at 7.9%, water supply at 7.7%, and restaurant services at 6.4%.
Why electricity keeps driving inflation
Year on year price growth in the “Energy” group accelerated from 4% in the first quarter to 6.8% in the second. RZS explains that this acceleration is not the result of a new electricity price hike in 2026, but of the carryover effect from last October’s increase, combined with more volatile fuel prices at the pump during the second quarter. The office adds that the rise in energy prices in the first half of the year reflects a transitional phase of controlled adjustment tied to reform commitments to the International Monetary Fund, with the full statistical impact on inflation expected only in the second half of the year, following price increases already announced for the autumn.
Alcoholic beverages and tobacco rose 5.4% year on year, led by tobacco products, which climbed 6.1%.
Medicine and water push up household bills
Health was the second most significant group, with prices up 7.8%. Most of that increase came from medicine, which grew 7.7% over the year.
“Since medicine represents the most significant item in citizens’ personal health related spending, its price increase acted as the decisive factor shaping the final outcome for the entire group over the half year, while other subcomponents, such as medical and dental services, followed the same trend at a more moderate pace,” RZS stated.
The office cites higher import costs, rising global prices for active pharmaceutical ingredients, and strict regulatory procedures for price harmonization and import licensing as the main causes.
The “water supply and other housing related services” group recorded year on year growth of 15.4%. Within that group, water supply alone rose 20.3% year on year, which RZS attributes to administrative price corrections made by local governments.
Cevapi leads the rise in restaurant prices
The “restaurants and hotels” group grew 6.4% year on year, a rise RZS says was driven mainly by food service, while hotel accommodation played a secondary role. The single biggest factor behind the increase in this group was the rising price of cevapi in flatbread, which accounted for 21.5% of the group’s overall year on year growth. It was followed by food in traditional restaurants at 14.9% and beverages at 9.3%.
RZS explains that during the first half of the year, particularly in the second quarter and the spring season, restaurant owners used the prices of their bestselling fast food and restaurant items to offset higher costs for their own inputs: meat, flour, energy and labor.
The only categories with a deflationary effect on overall consumer prices in the first half of 2026 were ready made food and other food products, sugar, confectionery and desserts, and cereals and cereal products, all of which became cheaper.
