Favourable Monetary Policies To Boost Growth

Moderating retail activity and a deceleration prompted BMI to revise its 2006 automotive sales growth estimates down to 7.1%, from 8.0%, in the latest Serbia Automotive Report. Sales growth is not expected to drop further in the forecast period. GDP growth is forecast at above 6.0% in 2007, with inflation set to diminish as a result of a strong currency unit following hikes in interest rates by the central bank. The success in monetary policy to keep inflation down means an easing of interest rates is on the cards. A strong exchange rate will help reduce the price of vehicles.

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