World Bank upgrades Serbia's 2024 GDP growth estimate to 3.5%

Economic growth this year will be mainly driven by consumption, and will quicken to 3.8% in 2025 and to 4.0% in 2026, the World Bank said in its latest Economic Update for Europe and Central Asia report.

"Over the medium term, under the baseline scenario, the Serbian economy is expected to grow at around 3-4 percent. With limited space for future stimulus packages, structural reforms are needed to accelerate growth which in turn will help to accelerate convergence to EU incomes," the statement read.

Foreign direct investment is expected to continue to play a key financing role, it added.

The World Bank projects 5% annual average inflation in Serbia this year, expecting price growth to slow down to 3.5% in 2025 and 3.2% in 2026.

Serbia's current account gap is projected to widen to 3.6% of GDP this year, from 2.6% of GDP in 2023, and to further expand to 3.9% of GDP next year and 4.1% of GDP in 2026.

The fiscal deficit, on the other hand, is seen shrinking to 2.0% of GDP in 2024, from 2.2% of GDP last year, and will continue to drop to 1.5% of GDP in each of the next two years, the World Bank noted.

Consumer prices in Serbia rose by an average 12.1% in 2023, ending the year with annual growth of 7.6%. The country's economy grew by 2.5% in 2023, according to statistics office figures.

The World Bank also said it expects growth in the Western Balkans, including Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia, to accelerate to 3.2% in 2024 and 3.5% in 2025, from the estimated 2.6% in 2023.