November 5 (SeeNews) - The European Commission (EC) has revised up its economic projection for Serbia on Thursday and now expects the country's gross domestic product (GDP) to decline by 1.8% in 2020, versus a 4.1% contraction envisaged earlier.
"The Serbian economy is projected to contract only moderately in 2020, due to a relatively short duration of the most stringent containment measures and significant policy support to mitigate the crisis impact," the Commission said in its Fall 2020 Economic Forecast.
A recovery to pre-crisis output and growth levels is foreseen for 2021 when the Serbian economy is expected to grow by 4.8%, driven by investment and private consumption, the EU Commission said.
The economy is set to return to its pre-crisis rate of expansion of close to 4% in 2022, mostly driven by private consumption and investment and a more positive contribution from net exports as export growth is expected to exceed import growth in 2022, in line with the recovery in the EU, the EC noted.
"The economic contraction and sizeable fiscal mitigation measures will lead to a sharp temporary increase of the general government deficit in 2020. The debt-to-GDP ratio is set to increase by around 10 percentage points in 2020 and to slowly decline thereafter," EU Commission said.
European Commission's outlook on the main economic indicators of Serbia (pct change), as per Fall 2020 Economic Forecast:
|
2020 |
2021 |
2022 |
GDP growth |
-1.8 |
4.8 |
3.8 |
Debt-to-GDP ratio (in pct) |
61.5 |
60.7 |
59.6 |
Unemployment rate |
9.3 |
9.6 |
9.0 |