Serbia Economic Outlook
May 12, 2020The domestic-driven economy is taking a beating in the second quarter as the lockdown measures have stifled the services sector and caused an inevitable spike in unemployment. Moreover, elevated uncertainty, postponed projects and a retreat in FDI will be battering fixed investment, which had surged at the end of 2019. Although limited, data for the end of Q1 highlights the incipient downturn: In March, tourist arrivals fell by over 50%, industrial production dipped and merchandise exports tumbled on frail demand from key trading partners Germany and Italy. The government’s strong fiscal response should help cushion the blow, however. On 1 May, S&P Global Ratings revised its outlook on Serbia from positive to stable, citing the economic fallout and the worsening external financing scenario as downside risks, although Serbia’s buffers of high international reserves and fiscal space represent upside risks to the outlook.
Serbia Economic GrowthAfter five years of uninterrupted growth, the economy is expected to contract this year due to containment measures and the deteriorating global backdrop. Private consumption, fixed investment, and exports will all be devastated by the pandemic, although robust fiscal and monetary stimulus should limit the contraction and spur a swift recovery. FocusEconomics panelists see GDP contracting 3.2% in 2020, which is down 2.3 percentage points from last month’s forecast, before growing 5.1% in 2021.
Serbia Economy Data
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|Bond Yield||3.05||0.0 %||Dec 31|
|Exchange Rate||104.9||-0.31 %||Jan 01|
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Serbia Economic News
July 9, 2020
On 9 July, the Executive Board of the National Bank of Serbia (NBS) maintained the key policy rate at an all-time low of 1.25%. In assessing the impact of the Bank’s previous monetary policy actions to mitigate the fallout from Covid-19, the NBS determined that its coordinated effort with the fiscal authorities to support the financial and real sector in the face of the pandemic will facilitate “the fastest possible” economic recovery.
Serbia: Ruling SNS handed landslide victory in June parliamentary elections, policy continuation expected
July 7, 2020
In parliamentary elections held on 21 June, the incumbent Serbian Progressive Party (SNS) won a landslide victory, which should translate into large-scale policy continuation.
June 30, 2020
Industrial production dropped 9.3% year-on-year in May (April: -16.6% yoy), according to a preliminary estimate.
June 12, 2020
Consumer prices fell 0.2% over the previous month in May, contrasting the flat reading in April.
June 11, 2020
On 11 June, the Executive Board of the National Bank of Serbia (NBS) opted to trim the key policy rate by 25 basis points to a new all-time low of 1.25%.