March 19 (SeeNews) - Erste Group said on Monday it expects Serbia's gross domestic product (GDP) to grow by 2.6% in the first quarter of 2018, backed by stronger domestic demand.
The growth figure for the first quarter of 2018 should land at 2.6%, versus 1.1% in the first quarter of 2017 and 2.5% in the fourth quarter of last year, Erste Group said in a Central and Eastern Europe Insights report.
"Unlike in most other countries in the CEE region, in Serbia, we expect an acceleration of economic activity in 2018, as the modest growth performance 2017 was marked by the effects of negative one-offs in the agriculture and energy sectors," Erste Group said.
Domestic demand will be the key driver of growth in 2018, as we expect that rising private and public wages, the stronger labour market, new public investment cycle, stronger lending activity and stronger foreign direct investment (FDI) inflows should support the growth of public and private consumption and investments, the bank noted.
Exports are expected to maintain their robust performance, but we expect a marginally negative contribution from net exports, as stronger domestic demand will put stronger pressure on imports, Erste Group added.
Serbia's prime minister Ana Brnabic said last week the country's GDP increased 4.2% year-on-year in January on the back of the positive economic trends since the beginning of the year.
Earlier this month, Erste Group said it expects Serbia's GDP growth to quicken to 2.9% in 2018 from 1.9% in 2017, on the back of stronger domestic demand, but also stronger imports.