UniCredit reviews Serbia’s 2017 GDP growth projection up to 3%

UniCredit Bank reviewed the projection of Serbia’s 2017 economic growth to 3%, which is 0.6 percentage points more compared to the previous projection of September. The bank estimated that the local economy was in its best state since the advent of the global economic crisis.

The bank estimates that Serbia’s GDP grew by 2.7% in 2016, which is 0.1 percentage points more compared to the September projection, says the quarterly CEE report. UniCredit projects the identical growth rate of 3% for 2018.

The bank says that the state investments in infrastructure will remain the driving engine of the growth in 2017, taking into consideration all the projects of road and railway infrastructure financed by loans from Russia, China and Azerbaijan.

– A good harvest and new foreign investments in heavy industry, car component production and agriculture might keep the growth of export above 5%, thereby compensating for the drop in production of Fiat, the largest Serbian exporter – UniCredit says.

The bank expects that private consumption will have a more significant role in keeping economic growth at 3% in 2017. At the same time, public investments might slow down unless the government reduces the losses of state-owned enterprises or increases its debts.

The main risks are foreign exchange credit exposure and potential snap election in April, UniCredit notes and suggest to the government to issue EUR-denominated bonds in order to stabilize external financing and reduce the pressure in the local market, Wisebroker reports.

UniCredit Bank Srbija a.d. Beograd

FCA Srbija doo Kragujevac

UniCredit Bank

economic growth of Serbia

GDP of Serbia

investments in Serbia

Fiat

state owned enterprises

election in Serbia