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BELGRADE (Serbia), December 21 (SeeNews) - Italian banking group Intesa Sanpaolo said on Wednesday it has increased its 2016 economic growth estimate for Serbia to 2.7% from the 2.3% projected earlier, owing to a successful agricultural season and expansion of construction, industry and some service sectors.
The forecast for 2017 has also been raised, to 2.9% from 2.7%, on the back of new investments and continued implementation of infrastructure projects, Intesa Sanpaolo said in a December forecast note considering the countries where it has subsidiaries.
"Rising exports and higher consumption underpinned by employment gains and private sector wage hikes should positively contribute to growth in 2017", the lender said.
Inflation is expected to move within the 2017 target band of 1.5%-4.5%, set by the Serbian central bank, and to stand at 2.0% in 2017, driven by the low base effect from primary commodities, gradual strengthening of demand and rising inflation abroad.
Intesa Sanpaolo expects 3.2% growth of total lending in Serbia in 2017 as a result of past monetary easing, expansion of the economy and competition among banks in the market. Bank deposits are expected to increase by 7.0% in 2016 and by a further 5.0% in 2017.
Banca Intesa Beograd is the Serbian unit of the Italian banking group.