EU projects economic growth of Serbia of 3.2% in 2017 – Expected inflation 3.4%

The European Union reported today that it expected Serbia's economic expansion to accelerate and estimated that the growth of the local GDP would amount to 3.2% in 2017 and to 3.6% in 2018.

The report estimates that a robust growth of revenues will support further reduction of the budget deficit and notes that the local demand is growing, contributing to an increase in exports and public revenues.

It is expected that Serbia's economic growth will strengthen mostly on the basis of strong private consumption, and the projection is that exports and investments will remain robust. The report warns, however, that as a result of that, but also due to foreign exchange losses, the foreign exchange imbalance is expected to increase.

According to the estimate of the European Commission, the budget balance will exceed the goals and result in a slight surplus in 2018.

The growth of exports, which reached the record 11.9% in 2016, will slow down to 7.9% in 2017 and 7.3% in 2018, according to the EC, whereas the imports are expected to grow from 6.8% in 2016 to 7% in 2017, and the growth in 2018 is projected at 6.9%.

The unemployment rate in Serbia, according to Brussels' estimate, will drop from 15.3% in 2016 to 13.1% in 2017, with a further tendency to drop to 11% in 2018.

The EC expect the inflation to enter the range targeted by the National Bank of Serbia at the rate of 3.4% in 2017 and 3.5% in 2018. It is also estimated that the public debt will drop from 73.6% in 2016 to 71.1% in 2017 and continue to drop to 67.3% in 2018.

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