August 19 (SeeNews) - The Serbian central bank has made a forecast this week that the country’s gross domestic product (GDP) will grow by 3% in 2017, while analysts believe that its expectations are not based on economic indicators that would enable it.
The expansion will be backed by better performance in the manufacturing industry and growth in the construction sector, the National Bank of Serbia (NBS) noted in its presentaion on Wednesday.
Foreign investment consultant Mahmut Busatlija sees as an obstacle to the realization of the central bank's forecast the reduction of production capacity of Serbia's biggest exporter, Fiat Chrysler Automobiles (FCA), a joint venture of Italy's Fiat and the Serbian state, which recently cut its workforce by 700.
"Serbia's export capacities are weakening and without export growth there is no economic growth," Busatlija said.
Faculty of Economics professor Miroslav Prokopijevic points out that higher economic growth requires structural reforms, which have been absent for many years now.
"There is not enough potential in Serbia for something like that," Prokopijevic said, adding that the country needs long-term economic plans and measures, but lacks the political will to adddress the issue.
Serbia's economy expanded by 1.8% year-on-year in the second quarter, slowing sharply from a 3.5% in the first quarter, the country's statistics office said earlier this month.
In 2015 the GDP marked a mere 0.8% growth, which is expected to accelerate to 2.5% this year, according to the central bank's outlook.