Serbia GDP Q4 2020


Serbia: Economy contracts at softer pace in Q4

March 1, 2021

GDP slid at a milder pace of 1.1% year-on-year in the final quarter of 2020, following the 1.4% contraction tallied in the third quarter. On a seasonally-adjusted quarter-on-quarter basis, economic growth waned markedly in Q4, slowing to 2.2% from the previous period's 7.2% increase. Taking the year as a whole, the economy shrank 0.9% in 2020, contrasting 2019’s 4.2% expansion and marking the first contraction since 2014.

The fourth quarter’s softer annual contraction largely came on the back of a rebound in the external sector. Exports of goods and services bounced back in Q4, growing 2.1% year-on-year (Q3: -8.5% yoy). In addition, imports of goods and services rebounded in Q4, growing 0.8% and contrasting Q3’s 2.7% decline.

Meanwhile, on the domestic front, private consumption fell 2.7% in the fourth quarter—a sharper drop than the third quarter's 1.1% contraction—likely reflecting the tightening of restrictions amid a resurgence in Covid-19 cases. On the other hand, government spending bounced back, growing 4.6% in Q4 (Q3: -1.1% yoy), while fixed investment dropped at a milder pace of 4.1% in Q4 (Q3: -4.5% yoy).

Economic growth is forecast to return this year as activity rebounds amid the relaxation of restrictive measures. Moreover, the reopening of foreign economies will boost external demand. That said, the outlook is clouded by lingering downside risks amid uncertainty over the evolution of the pandemic, a rise in unemployment and the phasing out of some relief measures.

FocusEconomics panelists see GDP expanding 4.5% in 2021, which is down 0.1 percentage points from last month’s forecast, before growing 4.2% in 2022.


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Serbia GDP Chart

Serbia GDP Q4  20 20 1

Note: Year-on-year changes of GDP in %.
Source: Statistical Office of the Republic of Serbia (SORS) and FocusEconomics Consensus Forecast.

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