Serbia will have single-digit inflation by the year's end, while in the next year it will be within the framework of four percent plus or minus one percent, the National Bank of Serbia (NBS) Governor Dejan Soskic stated, giving an estimate that the GDP growth in 2011 will run at 2.5 percent, contrary to the International Monetary Fund (IMF) projection which set it at 2 percent.

At an economic conference of the Raiffeisen Bank, Soskic underlined that by the end of 2011, Serbia will have single-digit inflation, thus dismissing the speculations that it will reach a double-digit level.

Recalling that in January the inflation ran at -0.3 percent, in July at -0.5 percent, while in August Serbia had zero inflation, he added this year's inflation was largely affected by the rise in the food prices, with a share of 37 percent.

Commenting on the bonds Serbia issued in the international market, Soskic said this is the first time that the government has issued bonds with a 10-year maturity, and the fact that the demand was twice as big as the offer is illustrative of the foreign investors' trust.

However, Soskic said that in the future Serbia must think carefully about possible loans, since it reached the threshold beyond which it will have to achieve the growth of economy if it wants to take out new loans from international institutions.

The NBS governor noted that Serbia is not among the heavily indebted countries, its public debt being below 45 percent of GDP, but that the pace with which the country has raised loans in the last two years is a cause for concern.

He said that in the first seven months of 2011, foreign direct investments amounted to EUR 1 billion, stressing that in the future they should be invested to expand production, since that generates a new growth of economy.

Speaking of Serbia's foreign currency reserves, Soskic said that they run at EUR 10.6 billion, exceeding the level of foreign currency reserves of the Socialist Federal Republic of Yugoslavia (SFRY) in 1990.

He added that the foreign currency savings in Serbia equal 7.5 billion, and have seen an increase of EUR 3 billion since 2008.

Commenting on the new arrangement with the IMF, which should be approved in Washington soon, Soskic said that the precautionary arrangement, besides procuring a new EUR 1 billion credit line, will represent a kind of confirmation for foreign investors that the national economy is stable.