Serbia GDP Q1 2020


Serbia: Economy loses notable momentum in the first quarter

June 1, 2020

GDP growth waned to 5.0% year-on-year in the first quarter, below the 6.2% expansion logged in the fourth quarter.

Household spending growth improved to 3.2% year-on-year in the first quarter, which marked the best reading since Q2 2019 (Q4: +3.1% yoy) and came despite Serbia entering a state of emergency on 15 March, with the government adopting various containment measures, including curfews and the closure of non-essential shops. Government spending growth accelerated to 12.0% (Q4: +2.5% yoy). Fixed investment growth waned to 10.7% in Q1, below the 29.6% increase in the prior quarter.

Exports of goods and services increased 3.1% in the first quarter, which was below the fourth quarter's 8.7% expansion, as the pandemic hurt foreign demand. In addition, growth in imports of goods and services eased to 8.3% in Q4 (Q4: +11.4% yoy), marking the worst reading since Q1 2019.

On a seasonally-adjusted quarter-on-quarter basis, the economy declined 0.6% in Q1, contrasting Q4's 1.7% expansion. Q1's reading marked the sharpest contraction since Q3 2014.

Looking ahead, the economy is forecast to enter a steep recession this year, which would mark the worst performance since the 1998–99 Kosovo War: Covid-19 will weigh heavily on both domestic and foreign demand, as well as inbound tourism.

FocusEconomics Consensus Forecast panelists pencil in a GDP contraction of 3.2% in 2020. In 2021, the panel sees the economy growing 5.1%.


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Serbia GDP Chart

Serbia GDP Q1  20 20 0

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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