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The Government of the Republic of Serbia

In the service of citizens

Serbia records 0.2% deflation in September

Belgrade, 29 September 2006

Director of the Serbian Statistical Office Dragan Vukmirovic said today that Serbia has recorded a 0.2% deflation in September and noted that single-digit inflation by the end of the year is possible.

Dragan Vukmirovic at today's press conference

Vukmirovic told a press conference that inflation largely depends on the prices of energy sources and said that the announced decrease in oil prices may affect the monthly inflation index by 0.4%.

He said that retail prices of goods and services in Serbia in September 2006 increased by 6.1% against December 2005, whereas these prices went up by 11.6% against September 2005.

The consumer price index in September 2006 decreased by 0.1% on average when compared to the previous month whereas it increased by 5.2% relative to December 2005, he said.

Vukmirovic noted that prices of agricultural goods saw a 3.8% decrease while prices of industrial food products rose by 0.5% on average.

In foreign trade, Serbia’s deficit in the first seven months of 2006 amounted to €3.1 billion, 26.6% up against the same period of the previous year, he said.

The country’s total foreign trade in the January-August 2006 period totalled €7.9 billion ($9.8 billion), which is 26.4% more than in the same period of 2005.

Total exports amounted to €2.4 billion, or 26.2% more than in the same period of 2005, while imports were worth €5.5 billion, or 26.4% more than in the same period last year, Vukmirovic said.

According to the Statistical Office, the export-import ratio in the first seven months of 2006 was 43.8%, whereas it stood at 43.9% last year.

The increase of imports in the past seven months was mainly due to import of energy sources ($1.1 billion), copper and iron ores ($182 million), but was also due to greater demand, Vukmirovic explained.

Export growth mainly came as a result of privatisations and company restructuring, signed and ratified agreements with signatory countries of the Stability Pact, he said. A surplus in food trade influenced the increase in Serbia's exports. In the first seven months, the export of fruits and vegetables amounted to $140 million, export of cereals and cereal products $122 million, export of corn $76 million, and sugar $87 million.

Vukmirovic explained that a surplus in the trade of finished textile products, which is a result of the agreement with the EU and the preferential status which Serbian goods enjoy, as well as of the increase in the prices of basic metals on the world market and of the growth in the world economic activity, also influenced the growth in exports.

GDP in the second quarter of 2006 totalled 283,642 million dinars, which is 6.6% more than in the second quarter of 2005, Vukmirovic said.

According to data of the Serbian Statistical Office, the industrial production in Serbia in August 2006 grew by 1.1% in relation to August 2005, and by 0.8% in relation to last year's average.