BELGRADE (Serbia), July 15 (SeeNews) – Austria's Erste banking group said it expects Serbia's consumer prices to rise by about 2% in 2019, the same rate of increase as in 2018, due to external factors.
"Consumer Price Index (CPI) prints should, in our opinion, hit bottom in the summer months and then again start to pick gradually later this year," Erste said in an instant comment on Friday.
Serbia's average annual consumer price inflation slowed to 1.5% in June, from 2.2% in May, official statistics showed on Friday.
The inflation returned to the lower part of the 1.5%-4.5% target band of Serbia's central bank after a brief spike due to vegetable price shock earlier this year, Erste noted, adding that the extent of the decline is somewhat surprising given ongoing wage and consumption growth.
Last week, Erste said it expects Serbia's central bank, NBS, to cut its key repo rate to 2.5% from 2.75% by the end of the year to back economic growth amid low inflationary pressure.
Serbia's central bank said on Thursday it decided to cut its key repo rate to 2.75% from 3.0%. NBS last cut the repo rate by a quarter of a percentage point to 3.0% in April 2018 to help guide inflation to its target band.
Serbia's average annual consumer price inflation slowed to 2.0% last year from 3.0% in 2017.