National Bank of Serbia Vice Governor Bojan Markovic said Saturday that the inflation reached its maximum of 14.7 percent in April, adding that it will probably drop below ten percent by the end of the year and reach the target figures in the first half of 2012.

Speaking at the Summer Vivaldi Forum on the Mokra Gora mountain, Markovic pointed out that the target inflation for the end of 2011 was 3-6 percent.

The inflation drop will be affected by the monetary policy, stable inflation expectations, low demand, and a gradual drop of pressure coming from food prices, Markovic explained.

The inflation surge earlier this year was caused mostly by increased food prices, which happened because of a poor harvest in 2010 after two very good years, he noted. The central bank will gradually drop the reference interest rate as the inflation goes down, but it will do so very carefully, said Markovic.

The key challenges concerning the monetary policy will be to maintain a low and stable inflation, ensure financial stability and achieve economic growth, which should be at 3 percent this year, he concluded.