Kvartalni Monitor: Economic Growth in Serbia This Year at 2%, with Big Risks

The economic growth in Serbia this year will be at 2%, and there are risks of its being even smaller, as estimated by the authors of the Kvartalni Monitor newsletter.

At the presentation of the new issue of the newsletter, it was said that the risks to realizing the projected economic growth were the bad agricultural season, a slower drop of inflation, a new energy price growth and the deepening of the crisis in Europe.

– In the economy of Serbia at the beginning of 2023, negative trends are mostly dominant. Economic activity is stagnating, the inflation grew until March, the employment rate is slightly growing, but the real salaries are dropping, the external deficits are lowered, the credit activity is slowing down, the interest rates are growing – the publication says.

It is estimated that the inflation in Serbia, which amounted to 14.8% in May, could drop to 9-10% by the end of the year, whereas the official projection is that it will amount to 8%.

The lowering of the inflation is supported by the drop of the prices of raw materials, food, metals and energy sources in the global market and, additionally, the National Bank of Serbia is tightening the monetary policy by increasing the key policy rate.

– The key macroeconomic challenge of Serbia is a relatively quick and perceptible lowering of the inflation. In order to achieve this, it takes strong coordination of the fiscal and monetary policies. For now, only the monetary policies are going in that direction – it is said in the newsletter published by the Faculty of Economics in Belgrade and its Foundation for the Advancement of Economics (FREN).

Ekonomski fakultet Beograd

Fondacija za razvoj ekonomske nauke Beograd

Narodna banka Srbije Beograd

Faculty of Economics in Belgrade

FREN

Kvartalni monitor

NBS

economic growth

inflation