June 5 (SeeNews) - Erste Group expects Serbia's central bank, NBS, to keep its key repo rate unchanged at 3.0% at its monetary policy meeting on June 7, the Austria-based banking group said.
The Serbian central bank is unlikely to cut the key repo rate from the current 3%, given the country's economic growth and the likely pickup of annual inflation in the remainder of 2018, Erste said in a weekly insights report on the countries in Central and Eastern Europe (CEE) published on Monday.
Serbia's gross domestic product (GDP) grew by a real 4.6% year-on-year in the first quarter of 2018, the country's statistical office said last week. On a quarterly comparison basis, Serbia's economy expanded by 1.5% in the first quarter of 2018, the statistical office said.
NBS said in May it decided to keep its key repo rate unchanged at 3.0%, taking into account that inflationary pressures are still low. Inflation should remain close to the lower bound of the target tolerance band by the end of this year, and should approach the target midpoint of 3.0% in the second half of 2019, NBS said.
The NBS could adopt a modestly hawkish stance in 2019, after the potential launch of European Central Bank (ECB) tapering and tightening of Fed's monetary policy under its new chairman Jerome Powell, Erste Group said in March.
($ = 0.811383 euro)