economy
March 8, 2026
Inflation affects households that spend less more
Inflation does not have the same effects on all population groups, and differences in consumption structure cause differences in exposure to price shocks, according to the results of an analysis examining the redistributive effects of inflation on different household groups, published by the National Bank of Serbia (NBS).
TL;DR
- Inflation disproportionately affects households with lower consumption due to higher proportions of spending on food and utilities, which saw the largest price increases.
- During 2022 and the first half of 2023, inflation was relatively higher for lower-spending households compared to those with higher consumption.
- A widening gap in inflation between the lowest and highest spending quintiles was observed, peaking mid-2023 at approximately 2.6 percentage points.
- Since early 2024, inflation has slowed, benefiting lower-spending households as food prices stabilized.
- In 2022, most households saw real wage stagnation or decline, with the most pronounced drop for low-income households.
- By 2024-2025, lower-income households experienced improved dynamics with inflation slowdown and minimum wage growth.
- The coverage of the minimum consumption basket by the minimum wage improved in 2024 and the first eight months of 2025, reaching approximately 95%.
Continue reading the original article