January 16 (SeeNews) - Italian financial group UniCredit revised down its estimate for Serbia’s gross domestic product (GDP) growth in 2023 to 1% from 2.3% due to the impact of high commodity prices, it said.
Lower real income growth and weak demand from the country’s main trading partners will also impact Serbia’s economic growth in 2023, UniCredit said in a quarterly macro research report on Central and Eastern Europe last week.
Consumption will likely remain the only driver of the GDP rise in 2023, despite real income growth falling to zero.
In 2024, Serbia's economic growth might pick up to 3%, as the economy begins to recover in the second half of 2023.
Serbia's fiscal deficit is expected at 3% of GDP, similar to that of 2022, due to support for state-owned energy companies, according to UniCredit. It will then narrow to 2% in 2024.
Inflation will peak in early 2023, driven by a rise in food and energy prices. Inflation is expected to remain above the target range in 2023, reaching 4.5% only at the end of 2024.
The standby agreement signed with the IMF should provide Serbia with significant fiscal buffers, UniCredit also said.