May 12 (SeeNews) - Erste Group said on Tuesday it expects Serbia's average annual consumer price inflation to stand at about 1% in 2020, below the 1.5%-4.5% target band set by the central bank, due to the adverse effects of the coronavirus crisis.
"We expect inflation will remain under the lower bound of the target band throughout the year and average around 1% this year," Erste Group said in an instant comment after Serbia's statistical office published inflation data for April earlier on Tuesday.
Serbia's consumer prices rose by 0.6% year-on-year in April, after growing by 1.3% in March, the statistical office said.
"As expected, inflation started to visibly decelerate reflecting the drop in commodities, notably fuel prices, but also weak aggregate demand in April, as the country went into lockdown following the outbreak of COVID-19," Erste Group said.
Serbia's central bank may reduce further the key repo rate in June after cutting it to 1.5% from 1.75% in April to counter the adverse economic effects of the coronavirus outbreak, Erste Group added.
Serbia's average annual consumer price inflation slowed to 1.7% last year from 2.0% in 2018.