Serbia Economic Forecast

Serbia Economic Outlook

January 8, 2019

While GDP growth cooled in the third quarter of 2018 owing to a relatively broad-based softening, the economy continued to expand solidly. Rising disposable income and sustained remittance inflows continue to support private consumption. Soaring imports, meanwhile, were testament to the strong domestic economy although led to a drag on headline growth, despite stronger exports. Turning to more recent developments, on 14 December S&P Global Ratings affirmed its BB credit rating for Serbia and upgraded the outlook to positive, citing a solid economic outlook, fiscal prudence and effective monetary policy as key factors behind its decision. However, on a gloomier note, Kosovo raised tariffs on a second set of Serbian imports on 28 December, after slapping 100% tariffs on all locally-produced Serbian goods in late November. Mounting trade tensions will likely translate into a greater drag on the external sector and could lead to a further worsening of relations between the two countries.

Serbia Economic Growth

Serbia is expected to remain one of the fastest growing countries in the region in 2019. Vigorous domestic demand should be underpinned by a tighter labor market, FDI inflows and fiscal spending. Nevertheless, economic growth will be sensitive to a potential slowdown in the Eurozone and tighter global financial conditions. FocusEconomics Consensus Forecast panelists expect the economy to expand 3.5% in 2019, which is unchanged from last month’s forecast, and to grow 3.2% in 2020.

Serbia Economy Data

20132014201520162017
Population (million)7.27.17.17.17.0
GDP per capita (USD)6,3506,1895,2355,4265,908
GDP per capita (EUR)4,7814,6724,7204,9055,234
GDP (USD bn)45.544.137.138.341.5
GDP (EUR bn)34.333.333.534.636.8
Economic Growth (GDP, annual variation in %)2.6-1.80.82.81.9
Consumption (annual variation in %)-0.4-1.30.40.81.8
Investment (annual variation in %)-12.0-3.65.65.16.2
Industrial Production (annual variation in %)5.6-6.18.44.83.5
Unemployment Rate22.119.217.715.313.5
Fiscal Balance (% of GDP)-5.5-6.6-3.7-1.31.2
Public Debt (% of GDP)59.670.474.771.961.5
Money (annual variation of M2 in %)13.912.114.415.17.9
Inflation Rate (CPI, annual variation in %)7.92.11.41.13.2
Policy Interest Rate (%)9.508.004.504.003.50
Exchange Rate (vs USD)83.1399.5111.3117.199.1
Exchange Rate (vs USD, aop)85.1788.54108.9111.3107.5
Exchange Rate (vs EUR)114.6121.0121.6123.5118.5
Exchange Rate (vs EUR, aop)113.1117.3120.7123.1121.3
Current Account (% of GDP)-6.1-6.0-3.7-3.1-5.7
Current Account Balance (EUR bn)-2.1-2.0-1.2-1.1-2.1
Trade Balance (EUR billion)-4.2-4.1-3.6-3.1-4.0
Exports (EUR billion)10.510.611.512.814.1
Imports (EUR billion)14.714.815.115.918.1
Exports (annual variation in %)25.51.27.611.910.0
Imports (annual variation in %)4.70.52.45.513.4
International Reserves (EUR)11.29.910.410.210.0
External Debt (% of GDP)77.670.476.773.074.4

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Serbia Facts

ValueChangeDate
Bond Yield3.650.0 %Jan 16
Exchange Rate103.9-0.31 %Jan 16
Stock Market1,525-0.44 %Jan 16

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Serbia Economic News

  • Serbia: Inflation remains subdued in December

    January 11, 2019

    According to the Statistical Office of the Republic of Serbia, consumer prices rose 0.1% over the previous month in December, following the 0.3% decrease logged in November.

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  • Serbia: National Bank of Serbia holds rates in January

    January 10, 2019

    On 10 January, the Executive Board of the National Bank of Serbia (NBS) voted to keep the key policy rate steady at 3.00%, where it has been since April 2018. Low and stable inflation again led the Bank to keep the rate unchanged at its latest monetary policy meeting.

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  • Serbia: Industrial production shrinks in November

    January 2, 2019

    According to data released by the Statistical Office of the Republic of Serbia, industrial production fell 1.0% over the same month of the previous year in November, following the 3.2% increase registered in October.

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  • Serbia: Inflation eases in November

    December 12, 2018

    In November, consumer prices fell 0.3% over the prior month, swinging from the 0.3% increase recorded in October.

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  • Serbia: National Bank of Serbia stands pat in December

    December 6, 2018

    On 6 December, the Executive Board of the National Bank of Serbia (NBS) voted to keep the key policy rate steady at 3.00%, where it has now been since April. At its latest monetary policy meeting, the Bank judged its current monetary policy stance supportive of overall price stability, while also buttressing strong economic momentum.

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