EBRD raises forecast of Serbia's economic growth in 2018 to 4.2%

The European Bank for Reconstruction and Development (EBRD) has raised the forecast of the growth of Serbia's gross domestic product in 2018 by 1.3 percentage points, from 2.9% in May to 4.2%.

In its latest report, published today on the finance institution's website, the EBRD keeps the forecast for 2019 at 3.5%.

In the updated “Regional Economic Prospects”, in the “Serbia” section, the EBRD says that “after a modest growth in 2017 (of almost 2%), the economy expanded by 4.9% year-on-year in the first half of 2018 on the back of stronger domestic demand, primarily higher investment”.

Private consumption also kept recovering, while imports, on the other hand, continued outpacing exports, it is added.

The EBRD says that “fiscal performance has remained strong, the budget stayed in surplus in the first half of the year and public debt kept falling (to around 60% of GDP at end-June)”.

The report also reminds that, in July 2018, Serbia signed a 30-month Policy Coordination Instrument (PCI, a new non-financing instrument) with the IMF, focusing on fiscal, structural and institutional reforms, and monetary and financial sector policies, all of which are key to sustaining the current high growth rates.

– The economy is projected to expand by 4.2% this year and to slow down to 3.5% in 2019. Faster growth is to be supported by further strengthening of consumption and investment. The risks to the projection are balanced and mainly relate to the implementation of reforms envisaged under the IMF’s PCI and the further pace of Eurozone growth – the report says.

EBRD Evropska banka za obnovu i razvoj Beograd

EBRD London

Međunarodni monetarni fond-MMF Beograd

European Bank for Reconstruction and Development

EBRD

International Monetary Fund

IMF

gross domestic product of Serbia

GDP of Serbia

growth of the GDP of Serbia

Policy Coordination Instrument

PCI