Vice Governor of the National Bank of Serbia (NBS) Bojan Markovic stated on Wednesday that inflation in Serbia would continue to drop in the next period and that it should return to the limits of the allowed deviation from target inflation in the first half of 2012.

During a presentation of the August report on inflation, Markovic underscored that strongest pressures on reduction of inflation in the next period should come as a result of changes in food prices.

He noted that other factors that would contribute to the drop of inflation comprise previously implemented monetary policy measures, low aggregate demand and probable drop of inflationary expectations.

He also noted that increase of government-controlled prices in the first six months of 2011 totalled 9.1 per cent, which means that the upper limit of the plan for 2011 has been reached.

Government-regulated prices should not increase significantly in the second half of the year, having in mind the fact that no substantial price hikes have been officially announced, he said.