Serbia’s Economic Growth Slower This Year, Will Accelerate in Next Two

Brussels (Photo: PrintScreen YouTube)

Serbia’s economic growth will remain slower in 2023 and then accelerate and exceed three percent in 2024 and 2025, since the effect of lower inflation on real income will boost private spending, the European Commission (EC) assessed in the Autumn 2023 Economic Forecast that was published on Nov. 15.

The Commission’s prediction is for Serbia’s gross domestic product (GDP) to grow by 2.2 percent in 2023, by 3.1 in 2024 and by 3.7 percent in 2025. Simultaneously, a further drop is expected in the overall state’s deficit and in the debt to GDP ratio, thanks to high nominal growth of the GDP and minor capital transfers to state energy enterprises.

According to the Forecast, inflation in Serbia should reach 12.7 percent in 2023, but drop back to single digits, 5.5 percent in 2024 and then further slow down to 3.6 percent in 2025, which is within the central bank’s target.

In the document, the European Commission underscored the great uncertainties and significant risks for growth to be slower, considering the ongoing Russian aggression on Ukraine and the intensifying of other geo-political tensions. The EC also warned that an inflation rate more persistent than the one currently projected could negatively affect the increase in purchasing power and thus slow down consumption and real growth.