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Serbia GDP Q2 2023

Serbia: GDP growth hits one-year high in Q2 2023

GDP growth gathered steam to 1.7% year on year in the second quarter, from 0.9% in the first quarter. Q2’s reading marked the fastest growth since Q2 2022.

Fixed investment growth sped up to 3.9% in Q2, supported by a strong rebound in construction output (Q1: +2.2% yoy). Government spending, meanwhile, slid at a milder pace of 1.1% in Q2 (Q1: -4.8% yoy). That said, private consumption plunged at the steepest rate in over two years, contracting 0.5% in the second quarter (Q1: -0.2% yoy).

Exports of goods and services growth fell to an over two-year low of 2.1% in the second quarter (Q1: +8.3% yoy). In addition, imports of goods and services contracted at a more pronounced rate of 5.8% in Q2 (Q1: -1.6% yoy), marking the lowest reading since Q2 2020.

On a seasonally adjusted quarter-on-quarter basis, economic growth gathered steam, picking up to 1.3% in Q2 from the previous quarter’s 0.2% increase. Q2’s reading marked the fastest expansion since Q4 2021.

Mate Jelic, analyst at Erste Group, commented on the outlook:

“We expect growth to remain subdued in 2023 […]. The moderation in growth, compared to previous year, reflects weak private consumption after a prolonged period of high inflation and considerable rise in interest rates. Despite slowing export performance, the overall contribution of net export to growth will be the key positive factor, as energy import pressures subside, allowing for stronger import contraction.”

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