September 23 (SeeNews) - Intesa Sanpaolo said on Wednesday it has upgraded its forecasts for Serbia's gross domestic product (GDP) growth for 2015 and 2016 to 0.5% and 1.5%, respectively.
The projections are in line with the economic outlook upgrades announced by the International Monetary Fund and the National Bank of Serbia, supported by faster growth of industrial production, investments and external demand, the bank said in a report.
Stronger recovery is currently postponed by ongoing fiscal consolidation in Serbia, Intesa Sanpaolo added.
The Serbian economy is projected to expand in 2016, led by investment and net exports while government consumption is likely to continue contracting due to further reduction of the budget deficit, the bank added.
Intesa Sanpaolo also said it expects inflation in Serbia to rise to 2.5% in the coming months from 2.1% in August and to trend closer to the 4% target from mid-2016.
Intesa Sanpaolo Group owns the largest bank by assets in Serbia, Banca Intesa.