August 18 (SeeNews) - Erste Group has said it can lower its forecast for Serbia’s annual economic growth in 2017 from the current 2.5%, due to disappointing performance in the second quarter.
Some acceleration of growth is expected in the second half of 2017, but if there is no upward revision of the flash estimate of the Serbian statistical office, Erste could trim its own forecast, the bank said in a report published earlier this week.
The Serbian economy expanded by a real 1.3% year-on-year in the second quarter of 2017, the country's statistical office said in a flash estimate on July 31.
Details on the gross domestic product (GDP) growth in the second quarter will be published August 31 and Erste expects the figures to show that the disappointing performance in the period under review was chiefly due to a drought, which has strongly hit agricultural production, the bank said.
According to some estimates, the fall in production of oats, vegetables and fodder could be around 30-40%, which is important, as the share of agriculture in the Serbian economy moves around 8-10% of Gross Value Added (GVA) and it accounts for around 6% of total exports, Erste noted.
Erste Group said in June it lowered its forecast for Serbia’s economic expansion to 2.5% in 2017, from 3.1% projected in March, due to the weaker than initially expected GDP growth in the first quarter. The forecast for Serbia’s economic growth in 2018 was cut to 3.0% from 3.4% previously,
Serbia’s real GDP growth slowed to 1.2% year-on-year in the first quarter of 2017, from 2.5% in the previous quarter.