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Serbia's Inflation Rate Hits 10 Percent


Serbia's dinar has lost about 30 percent of its value since the start of the global financial crisis in 2008.

Serbia's dinar has lost about 30 percent of its value since the start of the global financial crisis in 2008.

BELGRADE -- Serbia's annual inflation rate broke the 10 percent mark in November and is expected to continue to rise in the first quarter of 2011, RFE/RL's Balkan Service reports.

Central Bank Governor Dejan Soskic said the government had planned for inflation of 6 percent in 2010.

"We expect the upward trend in prices to continue," he said. "Only in March do we expect [inflation] to slow down."

Kosic added that a spike in food prices has been the main generator of the country's high inflation, and he blamed the situation on a lack of competition.

He urged the adoption of laws to break up the cartels and monopolies of several large companies in Serbia.

Economic analyst Sasa Djogovic of Belgrade's Center for Market Research said the government should put on hold its plans for early 2011 to unfreeze some controls on prices, pensions, and wages.

"The government, of course, should also cut public spending and create conditions favorable for foreign investment," he said.

Serbia's dinar has lost about 30 percent of its value since the start of the global financial crisis in 2008.

On December 13, the rate was 80.6 dinars to the dollar.

The Serbian economy shrank by 3 percent in 2009 and is expected to grow by 1.5 percent this year.

The government is battling a growing budget deficit that it wants to keep under 4.8 percent of gross domestic product, as agreed in 2009 with the International Monetary Fund under a 3 billion-euro standby loan.
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