Serbia's GDP decline in 2012 largest in southeast Europe

The World Bank said in a release on Tuesday (18 December 2012) that Serbia's gross domestic product (GDP) would drop by two percent in 2012, adding that it was the largest decline in southeast Europe. However, this financial institution also assessed that Serbia's economy would grow two percent next year.

The World Bank's chief economist for Serbia, Lazar Sestovic, said at a press conference that the growth forecast for Serbia's economy for 2013 was conservative and that the growth could be even bigger.

He noted that the GDP growth would be affected the most by the production at Fiat and its suppliers, as well as by the recovery of agriculture.

According to the World Bank's regular report for six countries in southeast Europe (Serbia, Bosnia-Herzegovina, Montenegro, Albania, and Kosovo), estimates are that the progress on the path toward permanent recovery of these countries in 2013 will be slowed down at best.

World Bank Chief Economist Zeljko Bogetic said that a problem in 2013 could be the risks regarding Eurozone recovery and high prices of standardized products in the international market, as well as a risk of new food price shock.

- In this fragile environment, it is necessary that Western Balkan governments implement reforms that contribute to a long-term growth and the creation of new jobs - Bogetic told reporters via video link from Washington.