Growth is seen accelerating to 4.3% in 2025, driven by private consumption, due to rising real incomes, and exports, benefiting from expanding manufacturing capacities thanks to strong foreign direct investment (FDI) inflows, the Commission said in its Spring 2024 Economic Forecast published on Wednesday.
In November, the Commission said Serbia's gross domestic product (GDP) is expected to expand by 3.7% in 2025.
"In spite of the high external uncertainty, risks to growth appear balanced. Recent years have proven the relative resilience of Serbia’s economy to external shocks. Still, a more persistent inflation than currently projected could weaken the pickup in purchasing power and thereby dampen consumption and real growth," the latest forecast of the Commission read.
The EU executive arm projects the average annual inflation in Serbia to cool down to 5.5% this year and to 3.6% in 2025, from last year's 12.7%.
"As a country-specific risk, investments needed for the specialised EXPO 2027 exhibition and the ‘Leap into the Future 2027’ programme could not yet be fully accounted into the current forecast as many of the outlays are not yet credibly planned and announced. Additional public investment could lead to higher GDP growth, but also to unforeseen public expenditure rises," the Commission noted.
In January, Serbian president Aleksandar Vucic said the country plans to invest 17.8 billion euro ($19.3 billion) in preparations for EXPO 2027, with the bulk to go towards the construction of facilities for the event. The four-year investment plan also includes projects in science and technology, energy and environment protection, among others.
According to the Commission, Serbia's general government deficit-to-GDP ratio is expected to remain unchanged on the year at 2.2% in 2024, and expected to shrink to 1.5% in 2025. The debt-to-GDP ratio, on the other hand, is set to fall to below 50% in 2025 from 51.4% in 2024 and 52.3% in 2023.
