Serbian c-bank expects 3% GDP growth in 2017

Serbian c-bank expects 3% GDP growth in 2017 Author: SeeNews. License: All rights reserved.

BELGRADE (Serbia), May 19 (SeeNews) - Serbia's central bank, NBS, expects the country's economy to grow by 3.0% in 2017 on the back of labour market recovery, NBS governor Jorgovanka Tabakovic said on Friday.

Economic growth is expected to accelerate to 3.5% in 2018, as structural reforms implemented by the government and improvement in business climate are encouraging economic development, Tabakovic said during the presentation of the Inflation Report for May 2017, according to a issued by NBS.

"A key fact regarding economic growth is that the current account deficit was reduced owing to outstanding export results of the Serbian economy, which was also facilitated by the investments made earlier and the recovery of external demand," Tabakovic said.

Also, greater product and geographical diversification of exports reduce the dependence on developments in individual markets and in turn makes Serbia’s exports and economic growth sustainable.

The current account deficit was reduced to 4.0% of GDP in 2016 and was fully covered by foreign direct investment - a pattern that is likely to continue in the coming period, which is helpful for strengthening the country’s external position, thereby increasing its resilience to external shocks, she added.

Last week, the European Bank for Reconstruction and Development (EBRD) increased its projection for Serbia's 2017 economic growth to 2.9% from 2.7%, as domestic demand is rising, with investment increase supported by an improved business climate based on successful fiscal consolidation and ongoing structural reforms. Serbia's economy is expected to grow by 3.0% in 2018, as rising employment and wages will support a further consumption recovery, the EBRD said.

The Serbian statistical office said earlier this month that the country's economy expanded by a real 1.0% year-on-year in the first quarter of 2017. Real GDP growth slowed to 2.5% year-on-year in the fourth quarter of 2016, from 2.8% in the previous quarter. In 2016, the country's economy expanded by 2.6%.

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