May 13 (SeeNews) - Serbia's gross domestic product (GDP) is expected to fall by 3.5% in 2020 due to the Covid-19 crisis, before rising by 6.0% next year, the European Bank for Reconstruction and Development (EBRD) said on Wednesday.
The EBRD made the forecast in the May 2020 edition of its Regional Economic Prospects report, reversing its November 2019 projection for economic expansion of 3.5% in 2020.
"In recent years, Serbia has increased its integration into global supply chains, mainly with the eurozone countries. The epidemic has disrupted international trade and forced several large manufacturers in Serbia to close temporarily," the EBRD noted.
Inflationary pressures remain subdued and, after three cuts of 25 basis points each in 2019, the central bank lowered the key policy rate by a further 75 basis points in total in March and April 2020, to 1.5%, the EBRD said, noting that the latest cuts sought to mitigate the impact of the pandemic on the economy.
The GDP of the EBRD's region of Central Europe and the Baltic States, which comprises Croatia, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia, is seen contracting 4.3% in 2020 before expanding 4.5% in 2021. Back in November, the EBRD forecast that the region's economy will grow by 3.2% this year.