UPDATE 1 - Serbia's 2009 GDP Seen Falling Real 2.9% - Stats Office

The estimate is based on preliminary figures showing growth in the transport, warehousing and communications sector, as well as in the financial and agriculture sectors, while other sectors have been recording falls, the statistics office said on its website.

Earlier on Wednesday, it said Serbia's gross domestic product (GDP) contracted by a real 2.3% on the year in the third quarter and shrank by a real 3.5% in the first nine months of 2009, compared to the same period last year. The GDP rose by a real 0.4% in the third quarter of 2009 compared to the previous quarter.

GDP contracted by revised 4.2% year-on-year in the second quarter, equal to the 4.2% real drop recorded in the first quarter.

Serbia's central bank said on Tuesday it expects GDP to grow by 1.5% next year.

Two analysts polled by SeeNews issued the following comments on the GDP data:

JURIJ BAJEC, ANALYST ADVISOR TO PRIME MINISTER MIRKO CVETKOVIC:

“What is significant is that today we received statistics data that the third quarter is better than the second one by 0.4%, so it comes to an increase in the economic activity at the year's end, or in its second half.

This mild recovery is owed to the fact that the situation in the industry is improving a bit and the sector will fall by 11%-12% this year. But the industry has a small share in the gross domestic product, only some 20%. At the same time agriculture will rise by some 3.0% and there will be a significant increase in the telecommunications sector, the financial sector and some other sectors in the sphere of services. So these increases compensate the drop in the other activities and the overall effect will be relatively not as bad as we expected in the fist quarter of the year.

Thus the total result in 2009 will be a smaller drop than in most of the neighbouring countries. We will have a smaller fiscal deficit, of only 4.5%, and only inflation remains higher than in some neighbours, it will be around 7.0%.

We look with a little more optimism at 2010. We expect it will come to positive growth rates. The International Monetary Fund projects 1.5% and some local analysts think it could be more since some major deals will be executed in the industry next year as the more serious job of Fiat and so on.”

MILOJE KANJEVAC, HEAD OF BELGRADE-BASED MARKETING RESEARCH INSTITUTE IZIT:

“We do not expect a very fast recovery. If this forecast of 1.5% [economic growth in 2010] is accomplished, the difference remains, as we are now at a lower level.

I think we have not yet touched the bottom but we are somewhere there. There are many layoffs in Europe and in the U.S. and production shrinks. Here, imports drop as we work less, exports fall as we produce less. And it is difficult to export as everyone is more or less in downturn, except for Asia. The rule is that it is much more difficult to exit a crisis than to bump into it.

The local currency rate is very important for the recovery. It should be a realistic one and much cheaper in order to exit the crisis sooner, to boost local production, sales, to increase exports and lower imports. This should be our Serbian policy.”