Serbia only country in the region to record GDP fall in 2015

Serbia will be the only country in southeast Europe to record a decline in gross domestic product (GDP) in 2015, which will amount to 0.5 percent, the World Bank said in an a report published today.

According to the World Bank's semiannual report on southeast Europe, this year is expected to see GDP growth in all countries of the region, except in Serbia.

- Serbia will probably stay in recession due to low domestic demand and difficult fiscal consolidation - said Galina Andronova Vinslet, the chief economist at the World Bank, at a press conference in Belgrade, during the presentation that was simultaneously held in capital cities of six regional countries.

Countries covered by the seventh report of the World Bank are Serbia, Bosnia-Herzegovina, Macedonia, Albania, Kosovo, and Montenegro. As she noted, a modest recovery of the region is expected this year with a projected average growth of 1.3%.

- It is likely that GDP growth will be limited in 2015 owing to poor recovery of Bosnia-Herzegovina and another recession in Serbia. GDP in the rest of the region is expected to grow over 3 percent in 2015, while GDP growth in Macedonia is projected at 3.8% - it is said in the report.

As she pointed out, a drop in economic activities in Serbia and Bosnia-Herzegovina is largely due to last year's devastating floods in these countries.

- Damages from floods in Serbia account for about five percent of GDP - she underlined.

According to her, an important issue that Serbia needs to resolve is high level of non-performing loans - 20%, one of the two highest in the region, as well as to put more effort into attracting foreign investments.

Vinslet adding that growth prospects in SEE countries depend on external factors, including a continuous recovery of external demand, especially in Europe, as well as fuel price stabilization in the international market on the current low level.

She said that economic growth in 2014 was slowed down primarily owing to devastating floods in some countries of the region, stressing that the growth of economic activities across the entire region was at 0.2% of GDP.

Svetska Banka-WB Beograd

World Bank

GDP

GDP fall

Galina Andronova Vinslet

economic growth of Serbia

fiscal consolidation

Lazar Sestovic

gross domestic product

recession