In the first half of this year, inflation trends in Serbia will mainly be determined by the effect of the global crude oil and meat prices – Erste Group forecasts in its projection for the region of Central and Eastern Europe.
This effect will, keep the inflation below the NBS’ 3%+/- 1.5pp in the first half of 2018, while in the second half of the year, Erste Group’s analysts expect a gradual acceleration of the inflation figure towards and above the target band.
“Our forecast is based on the expectations that the base effect will fade out in that period, commodity prices on international markets will be higher (according to NBS comments on futures), the dinar will be at weaker levels and the effects of the stronger labour market and domestic demand will kick in. We thus expect the highest inflation figure in the last quarter of 2018 at approximately 3.5% y/y”, the analysts say.
This year inflation outlook is rather homogenous for the CEE region as inflation rate is expected to accelerate toward or above central bank’s targets in mid-2018 and ease toward the yearend.
In Hungary, inflation is likely to accelerate from last year’s 2.4% to around 3% on average this year, and in Croatia, inflation should peak at the beginning of the third quarter of 2018 at a level close to 2% year-on-year, and afterwards revert to a downward trajectory, moving below 1.5%.
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