June 30 (SeeNews) - Italian banking group Intesa Sanpaolo said it has lowered its 2017 economic growth projection for Serbia to 2.8% from the 2.9% projected earlier, as investment growth slowed due to cold weather and the pre-election deadlock.
Real GDP growth is projected to accelerate to 3.2% in 2018 on the back of rising consumption, as employment picks up and wages increase, Intesa Sanpaolo said in a June forecast note considering the countries where it has subsidiaries.
Private sector investment inflow is expected to grow in response to improvements of the business ambience, the lender said.
Inflation is expected to continue to move within the tolerance band, with average consumer price inflation (CPI) at around 3.4% year-on-year in 2017 and 3.2% in 2018, driven by the gradual recovery of domestic demand and inflation abroad.
Intesa Sanpaolo expects 3.5% growth of total lending in Serbia in 2017 as a result of a further recovery in the overall economy, lower interest rates on dinar loans due to past monetary policy easing, low interest rates in the international money market, and increased interbank competition. Bank deposits are expected to increase by 6.5% in 2017.
Banca Intesa Beograd is the Serbian unit of the Italian banking group.