Fiscal Council: GDP to Exceed EUR 60 Billion, But We Produced Less Than Planned

The nominal gross domestic product (GDP) in this year will exceed EUR 60 billion, which is far above the projected EUR 56.5 billion. However, this increase is a consequence of the accelerated inflation with an unchanged exchange rate, and not a higher production in this year, the Fiscal Council warns.

In the analysis of the budget rebalance, this institution points out that we will produce even less goods and services than initially planned.

The nominal increase of the GDP is a consequence of the fact that the price of the produced goods and services is now far higher.

Instead of the initially expected real production (GDP) growth of 4.5%, a growth of around 3% will be realized, which directly affects the reduction of the nominal GDP by 1.5% compared to the plan.

However, instead of the expected average inflation of 3.7%, an inflation of 11.6% will be realized – which then influences the increase of the nominal GDP by 7.9%. These two factors combined caused the nominal GDP to increase compared to the initial prognosis by around 6.5%, that is RSD 444 billion (EUR 3.8 billion).

The Council warns that the economic growth is slowing down if the results in the first three quarters are observed.

Fiskalni savet Republike Srbije

nominal GDP

inflation

budget rebalance analysis

slowing down of economic growth