Erste expects Serbia's CPI growth to speed up slightly in Q4

"CPI prints should pick up only slightly in the last quarter, with expected readings around the lower part of the target band, due to demand-pull pressures which could intensify after the public sector wage hike in November," Erste analysts said on Friday in a comment on Serbia's most recent CPI data.

Serbia's average consumer prices rose by 1.1% year-on-year in September, after growing by 1.3% in August, dropping below the lower end of the 1.5%-4.5% target band set by the central bank for the second consecutive month. 

"If the degree of external uncertainty drops in the coming period, and inflation continues to undershoot expectations, we see high likelihood of another cut of the key rate before year-end," Erste said.

Serbia's average annual consumer price inflation slowed to 2.0% last year from 3.0% in 2017.