January 18 (SeeNews) - Italian financial group UniCredit said it expects Serbia’s real economic growth to accelerate from an estimated 2.5% in 2023 to 2.8% in 2024, driven by stronger consumption and investment, and to pick up to 3.1% in 2025.
"The new European Union growth plan for the Western Balkans will provide an opportunity for Serbia to make decisive steps towards EU accession," UniCredit said it its January 2024 CEE Quarterly report published earlier this week.
The plan allows some of the benefits of EU membership to be frontloaded, including funding and some access to the single market, in return for implementing reforms and engaging in normalizing relations with Kosovo, the financial group added.
"Missing this opportunity is one of the main risks to the outlook," according to UInicredit.
The plan envisages significant funding, 6.0 billion euro ($6.5 billion) in the period from 2024 to 2027 for the Western Balkans, of which Serbia could receive 3.8 billion euro, according to its GDP share in the region. This comes on top of the Instrument for Pre-accession Assistance III (IPA III) funds of 13 billion euro for the region. Integration in some areas of the single market will be another appealing feature and will be conditional on developing a common regional market, UniCredit noted.
"We expect inflation to fall below the upper bound of the central bank’s target range (4.5%) in the fourth quarter of 2024 and the National Bank of Serbia (NBS) to start cutting interest rates from June," UniCredit said.
Serbia's economy expanded by a real 2.5% in 2022.
($ = 0.920 euro)