Serbian central bank lowers GDP projection over Ukraine war

NEWS 18.05.2022 17:26
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Source: Tanjug/Zoran Žestić

The head of the Serbian central bank said on Wednesday that the GDP growth projection was lowered by one percent because of the effects of the war in Ukraine.

National Bank of Serbia (NBS) Governor Jorgovanka Tabakovic told a presentation of the NBS monthly inflation report that the projected GDP growth has been lowered from the initial 4.5 percent to 3.5 percent.

“In view of the negative effects produced so far by the Ukraine conflict, primarily its impact on global prices of energy and other raw materials, and the resulting global outlook revisions by leading international institutions, the NBS has revised Serbia’s GDP projection. Under our new projection, GDP growth this year will range from 3.5 to 4.5%, down by 0.5 pp from what we expected in February. The key factors behind the downward revision of real GDP growth include international developments – the negative effects of the conflict and estimates of lower economic growth in the euro area and countries of the region,” Tabakovic said.

The effects of the Ukraine conflict have so far not produced any major effects on economic activity in Serbia, the governor said.

“According to our new central projection, we expect y‐o‐y inflation to strike a downward trajectory in the second half of the year, though from a higher level than anticipated in February. It will most likely return within the target tolerance band in the second half of 2023, and then continue to slow down until the end of the projection horizon,” she said.