Serbia Economic Forecast

Serbia Economic Outlook

September 3, 2019

GDP growth should have accelerated in the second quarter, supported by stronger construction activity on key infrastructure projects, which likely boosted investment. Moreover, favorable financial conditions, a tighter labor market and rising wages should have supported private consumption. That said, weak industrial production—which was battered by the effects of the tariffs from Kosovo, weaker demand from the EU and factory maintenance—dragged on growth in the quarter. Available data points to a promising start for the third quarter. Industrial production recovered in July, after contracting nine times in the last year, thanks to a sharp rebound in manufacturing. Likewise, merchandise exports also rebounded in the same month, underpinned by strong demand from Germany and CEFTA countries.

Serbia Economic Growth

The economy is forecast to slow this year on moderating fixed investment and an unfavorable base effect from last year’s growth rate. Nevertheless, healthy consumer spending, robust FDI inflows and an improved business climate should support the economy. Risks from heightened tensions with Kosovo and a sluggish Euro area cloud the outlook, however. FocusEconomics panelists see GDP expanding 3.0% in 2019, which is down 0.1 percentage points from last month’s forecast, and 3.2% in 2020.

Serbia Economy Data

20132014201520162017
Population (million)7.27.17.17.17.0
GDP per capita (USD)6,7546,5945,5875,7576,288
GDP per capita (EUR)5,0854,9755,0345,2035,580
GDP (USD bn)48.447.039.640.644.1
GDP (EUR bn)36.435.535.736.739.2
Economic Growth (GDP, annual variation in %)2.9-1.61.83.32.0
Consumption (annual variation in %)-1.6-0.1-0.51.32.0
Investment (annual variation in %)-12.0-3.44.95.47.3
Industrial Production (annual variation in %)5.6-7.37.35.23.9
Unemployment Rate22.119.217.715.313.5
Fiscal Balance (% of GDP)-5.1-6.2-3.5-1.21.1
Public Debt (% of GDP)55.364.269.567.659.3
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)83.34100.3111.9117.298.56
Exchange Rate (vs USD, aop)85.1388.47108.8111.3107.7
Exchange Rate (vs EUR)114.6121.1121.3123.4118.3
Exchange Rate (vs EUR, aop)113.1117.3120.7123.1121.4
Current Account (% of GDP)-5.8-5.6-3.5-2.9-5.2
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 %)25.51.27.611.99.8
Imports (annual variation in %)4.70.52.45.513.4
International Reserves (EUR)11.29.910.410.210.0
External Debt (% of GDP)73.066.171.968.869.6

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Serbia Facts

ValueChangeDate
Bond Yield3.100.0 %Sep 04
Exchange Rate106.4-0.31 %Sep 04
Stock Market1,589-0.44 %Sep 04

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