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Erste affirms Serbia's 2019 GDP growth forecast at 3.3%

Author Radomir Ralev
Erste affirms Serbia's 2019 GDP growth forecast at 3.3% Author: Georgi Georgiev. License: All rights reserved.

BELGRADE (Serbia), September 3 (SeeNews) – Erste Group has kept unchanged its forecast for Serbia's economic growth in 2019 at 3.3%, to continue to be supported by strong domestic demand, it said.

After a considerable slowdown of growth at the beginning of the year, economic activity started to quicken in the second quarter and a further acceleration is expected in the second half of 2019, Erste said in a comment on Serbia's most recent economic growth data on Monday.

The 2.9% year-on-year gross domestic product (GDP) expansion in the second quarter of 2019 reveals an unchanged growth profile, with robust domestic demand activity and exports headwinds weighing on overall growth, Erste said.

Public sector activity is expected to support overall economic growth, as consolidated budget still recorded a surplus in the period, notwithstanding the 31% annual capex increase in the first half.

"The downside lies in the net export contribution. Eurozone headwinds started to materialise lately, putting pressure on Serbia’s export performance, on top of still unresolved Kosovo tariff issue," the bank added.

Serbia's gross domestic product (GDP) expanded by a real 2.9% year-on-year in the second quarter of 2019, backed by a significant real growth of gross value added in the construction sector, of 16.8% year-on-year, while the information and communication sector expanded by 8.2%, Serbia's statistical office said on Monday. On a quarterly comparison basis, Serbia's economy expanded by 1.2% in April-June 2019.