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BELGRADE (Serbia), April 4 (SeeNews) – Austria's Erste banking group said it expects the positive retail sales trend in Serbia to continue throughout the year supported by booming employment and steady growth of disposable income.
"On a somewhat longer horizon, prime minister Ana Brnabic recently hinted that the government could hike public sector wages again at the end of the year if gross domestic product (GDP) growth amounts to at least 3.5% this year," Erste analysts said in a comment on Serbia's most recent retail sales data last week.
Retail sales in Serbia rose by 10.8% on the year in February, exceeding the 4.9% increase forecasts of Erste analysts and suggesting a dominant role of personal consumption in the GDP growth in the first quarter of 2019, Erste said.
Strong trade figures are owed to real wage growth and positive labour market developments, as employment rate is on the verge of crossing the 60% mark, Erste said.
"Falling active interest rates also spurred loan growth, as total household credit growth reached 12% y/y at the end of last year, with especially strong growth of cash loans."
Serbia’s retail sales increased by a real 4.2% in 2018, after a 3.7% rise in the previous year, the country's statistical office has said.