The inflation rate in Serbia will rise in 2011, and is very unlikely to stay within the projected limits of 4.5 percent, plus or minus 1.5 percent, domestic economic experts said Monday.

President of the Belgrade Free Market Center Miroslav Prokopijevic said that in the coming year, the inflation rate in Serbia would, at best, move between eight and 10 percent, and at worst, between 15 and 20 percent.

Prokopijevic considered that the main cause of inflation was more money in circulation and noted that in October 2010, there was 12.9 percent more money in circulation than in the same month the year before.

The National Bank of Serbia (NBS) would never want to put the money in circulation itself, but does so due to the influence of other factors, said Prokopijevic.

In an expert debate on inflation and economic forecasts for 2011, Deputy Director of Statistical Office of the Republic of Serbia Miladin Kovacevic said the NBS is not in a position to do much in fighting inflation because it cannot raise the benchmark interest rate and reserve requirements.

An increase in the repo rate from the current 11.5 percent would worsen the liquidity in the economy, he stressed. According to Kovacevic, the main reasons for high inflation are the growth in food prices and the depreciation of the exchange rate as a result of balance of payments imbalance.

Kovacevic believes it is good that Serbia has the floating rather than the fixed exchange rate policy, which is why the country relatively “painlessly” adapted to the changes in the last two years.