Serbia Exports (G&S, ann. var. %)

GDP grows at softest pace in two years in Q4

Activity softened in the fourth quarter, with GDP expanding 0.4% year on year (Q3: +1.0% yoy). Q4’s reading marked the slowest growth since Q4 2020.

The moderation was driven by weakening private consumption and fixed investment. Private spending growth fell to 1.5% in Q4 (Q3: +3.1% yoy), marking the weakest expansion since Q1 2021. Public spending contracted at a softer rate of 2.4% in Q4 (Q3: -3.8% yoy). Meanwhile, fixed investment slid at a quicker pace of 2.7% in Q4, from the 1.9% decrease in the previous quarter.

Exports of goods and services growth fell to 12.9% in Q4 (Q3: +16.9% yoy) marking the weakest reading since Q1 2021. Similarly, imports of goods and services growth waned to 6.6% in Q4 (Q3: +11.0% yoy).

On a seasonally adjusted quarter-on-quarter basis, economic activity bounced back, expanding 0.7% in Q4, contrasting the previous quarter’s 0.7% contraction.

Giving their outlook, analysts at Erste Bank said:

“This year the impact of still high input prices on production, weak, if any, real income growth and slowing demand from the country’s main trading partners are all factors curbing growth. Consumption will likely remain a modest positive contributor, suffering from the still very much inflationary environment.”