European Commission Forecasts Serbia's Strong Recovery

European Commision

Serbia's economy is projected to rebound strongly in 2021, to above its pre-crisis output level, largely driven by investment and private consumption, the European Commission predicted on May 12 in its Spring 2021 Economic Forecast.

Having contracted by a mild one percent in 2021, the Serbian economy is expected to record a 5.3% GDP growth rate in 2021. According to the forecast, Serbia is set to return to its pre-crisis rate of expansion of around four percent.

Serbia's growth outlook is subject to a high level of uncertainty, and risks largely depend on the pandemic. "In particular, fast domestic progress in vaccination, avoiding further waves of the pandemic, could lead to an accelerated rebound in consumer confidence and boost private consumption, particularly in service sectors," the Commission went on to say in the report.

On the other hand, a protracted recovery in the Union might reduce net exports and foreign direct investment. Slower-than-expected implementation of public infrastructure projects and of reforms of state-owned enterprises could also have a negative effect on the growth prospects.