Investment in Serbia
Serbia - Investment
GDP records sharpest contraction since Q3 1999 in the second quarter
The economy received a notable blow in the second quarter from Covid-19 and related containment measures, with GDP contracting 6.4% on an annual basis (Q1: +5.1% year-on-year). The print marked the worst reading since Q3 1999.
The downturn was broad-based, with only public consumption increasing, although the growth was slower than in the prior quarter (Q2: +8.9% year-on-year; Q1: +11.8% yoy). Household spending contracted 8.0% in Q2, marking the steepest decline since Q2 1999 (Q1: +3.2% yoy), while fixed investment shrank 11.9%, marking the worst result since Q3 2013 (Q1: +10.8% yoy).
On the external front, exports of goods and services fell 20.7% on an annual basis, which contrasted the first quarter's 3.0% expansion. Similarly, imports of goods and services deteriorated, contracting 19.3% in Q2 (Q1: +8.1% yoy) and highlighting weakened domestic demand.
On a seasonally-adjusted quarter-on-quarter basis, GDP shrank 9.2% in Q2, down from the previous period's 0.5% fall. Q2's reading marked the sharpest downturn in over two decades.
The economy is set to contract sharply over 2020 as a whole. The health crisis is weighing on both domestic and foreign demand and, as such, private consumption, business activity, tourism and exports are all expected to suffer. That said, fiscal and monetary stimulus should soften the blow somewhat. However, the balance of risks remains tilted to the downside amid a second wave of infections and renewed restrictions in July.
Commenting on the outlook, Mauro Giorgio Marrano, senior CEE economist at UniCredit, stated:
“Looking ahead, another wave of coronavirus cases and the expiration of some government support measures could mean that the recovery might lose steam in 2H20. […] In particular furlough and tax deferrals are expected to expire at the end of September, with potential negative repercussions for the labor market, and therefore consumption and investment.”
FocusEconomics panelists see GDP contracting 3.1% in 2020, which is down 0.2 percentage points from last month’s forecast, before growing 5.1% in 2021.
Serbia - Investment Data
|Investment (annual variation in %)||4.9||5.4||7.3||17.8||16.4|
5 years of economic forecasts for more than 30 economic indicators.
Source: Statistical Office
|Bond Yield||3.05||0.0 %||Dec 31|
|Exchange Rate||104.9||-0.31 %||Jan 01|
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February 22, 2021
Consumer prices rose 0.60% month-on-month in January, up from December’s 0.10% increase.
February 11, 2021
The Executive Board of the National Bank of Serbia held fire at its 11 February meeting, leaving the key policy rate unchanged at its all-time low of 1.00%.
January 29, 2021
Industrial production grew 4.1% year-on-year in December, swinging from the 1.4% contraction in November.
January 14, 2021
At its first meeting of the new year on 14 January, the Executive Board of the National Bank of Serbia decided to keep the key policy rate at the all-time low of 1.00%, after lowering it by 25 basis points at its previous meeting in December.
January 4, 2021
Industrial output decreased 1.4% in year-on-year terms in November, which contrasted October's 1.9% increase.