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EC keeps Serbia's 2018 GDP growth forecast at 3.3% - table

EC keeps Serbia's 2018 GDP growth forecast at 3.3% - table European Commission headquarters in Brussels; Author: Radomir Ralev

BELGRADE (Serbia), May 3 (SeeNews) - The European Commission (EC) said it has maintained its forecast for Serbia’s economic growth in 2018 at 3.3%, backed by domestic demand and investment activity.

Gross domestic product (GDP) growth is expected to accelerate to 3.5% in 2019 as the unemployment rate is foreseen to decline to 10% next year from 12.1% in 2018, the Commission said in its Spring 2018 Economic Forecast published on its website on Wednesday.

While export growth is expected to remain robust, net exports contribution to growth is likely to be negative again this year, given strong imports. Inflation is foreseen to slowly return to the centre of the central bank target tolerance band, while the budget balance is set to remain in surplus, amid still non-negligible fiscal risks, the Commission said.

"A more vibrant economic growth should continue to work its way to further increase formal employment. Unemployment, however, despite decreasing over the forecast horizon, is expected to remain large in view of significant structural problems on the labour market," the Commission noted. 

Although fully covered by foreign direct investment, the size of the current account deficit is indicative of a major economic vulnerability. Fluctuations in commodity prices and international capital flow reversals remain the main risks to the forecast, the Commission added.

EC outlook on the main economic indicators of Serbia (pct change):

  2017 2018 2019
GDP 1.9 3.3 3.5
Private consumption 1.8 3.1 2.9
Public consumption 1.0 2.0 2.0
Gross fixed capital formation 6.2 6.8 6.4
Unemployment rate 13.6 12.1 10.0

 

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