European Commission revises projection of economic growth of Serbia down

The European Commission has revised the projection of the economic growth of Serbia for the current year down to 2% due to consequences of adverse weather conditions on agriculture, but it estimates that there’s a basis in Serbian economy for a greater growth of the GDP in the upcoming years.

In its Autumn Forecast for EU members and candidate countries, the EC projects that the GDP in Serbia will rise considerably in the next two years, reaching 3.3% in 2018 and 3.5% in 2019.

The projections of a smaller growth in 2017 are down to adverse weather conditions and the consequent fall of production in agriculture and construction, whereas private consumption is cited as the driving engine of the growth.

– A strong trend toward growth remains and expectations are that an upswing in economic activity before the year is out will occur – the report presented by EU Commissioner for Economic and Financial Affairs Pierre Moscovici said.

Moscovici reported that the estimate was that the GDP of the Eurozone in 2017 would grow considerably, reaching 2.2%, whereas the total growth of all EU members should stand at 2.3%.

The projection of Serbia’s economic growth also says that “investment activity was subdued, undermined by delays in government capital spending since the beginning of the year”.

The European Commission says that “driven by robust external demand in the EU and previous FDIs in tradeable sectors, exports growth remained very strong”.

– Private consumption, supported by rising income and employment levels, is seen as a key driver of growth, while exports are projected to remain strong – the document states.

The export and import will grow by around ten percent by the end of the year, but the foreign trade deficit in this and the next two years will remain at around 10%, the analysis estimates.

The document states that price pressures are forecast to be contained, that the y-o-y inflation amounted to 4% in July and that the Serbian budget should either be balanced or even have a surplus in the next two years, but also notes that “the main risks to the economy remain largely unchanged”.

The government debt, as added, is set to decline steadily and approach 60% of GDP by the end of the forecast horizon. The unemployment rate should drop from 15.3% in 2016 to 13.5% in 2017, be at 11.6% in 2018 and 9.5% in 2019.

EUROPEAN COMMISSION Bruxelles

Delegacija Evropske unije u Republici Srbiji Beograd

European Commission

forecast of economic growth of Serbia in 2017

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EC forecast of economic growth of Serbia

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Pierre Moscovici

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