May 8 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) said on Wednesday it is leaving unchanged its November projection for Serbia's 2019 economic growth at 3.5%.
Still, this will be a slowdown from last year's 4.3% increase in gross domestic product (GDP) but growth is seen inching up to 3.8% in 2020, the EBRD noted in its May 2019 Regional Economic Prospects report.
The bank said that this year private consumption, investment and exports should continue to be the main growth drivers in Serbia, with offsetting effects coming from higher imports.
"The risks to the projection are skewed to the downside and relate to the possibility of slower implementation of the reform agenda envisaged by the new IMF programme, a faster than expected slowdown of external demand from the eurozone and a continuing fall in mining and electricity production (present since mid-2018)," the bank said.
In addition, the EU's import quotas on Serbian steel and the introduction of 100% import tariffs by Kosovo might negatively affect Serbia's short-term economic prospects.
Regarding the region of Southeast Europe (SEE), the EBRD has lowered its 2019 economic growth forecast to 3.0% from 3.2% predicted in November, following a slowdown to 3.4% in 2018 from 4.3% in 2017. In 2020, growth in the SEE region is also seen at 3.0%.
"Each country in the region has its own challenges [...] The biggest challenge globally is the US-China trade war," the EBRD’s chief economist, Sergei Guriev, told SeeNews on the sidelines of the bank's annual meeting in Sarajevo, Bosnia.
"Our countries are not directly affected, but they are affected indirectly. If the Chinese economy goes down, the German economy goes down, and our countries are very much dependent on German and Western economies," Guriev said.