EBRD projects 3.3 percent growth for Serbia’s GDP

NEWS 28.09.2022 11:31
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The European Bank for Reconstruction and Development (EBRD) said on Wednesday that Serbia’s GDP is projected to grow at 3.3 percent in 2022-23.

“GDP growth is projected at 3.3 per cent in 2022 and 2023, with risks to the near term reflected in elevated inflation, weighing on disposable incomes, and worsening external demand due to the anticipated slowdown in EU markets,” the EBRD said in its regional report for September 2022.

It said that the economic recovery witnessed in 2021 continued into the first half of 2022, albeit at a slower pace, with output expanding by 4.3 and 3.9 per cent year-on-year in the first two quarters, respectively.

According to the report, household consumption continued to lead growth, though the rate slowed to 4 per cent in real terms in the second quarter following a 7 per cent expansion in the first. “While investment remained muted in the second quarter of the year, exports continued to grow strongly, by 20 per cent year-on-year in the second quarter, led by goods exports as industry expanded by 4.6 per cent,” the report said and added that the global rise in energy prices led to higher import costs and a widening of the current account deficit in the first half-year.

Annual inflation rose to 13.2 percent in August with the National Bank of Serbia (NBS) raising its key interest rate from 1 percent in March to 3.5 percent in September and introducing measures for basic foodstuffs, wood pellets and oil in support of the most vulnerable households, the report said and added that the coming winter will be a test for the energy sector and the government’s fiscal space.