The Serbian economy will grow by 2.2 percent in 2023 and 3.1 percent in 2024, as well as by 3.7 percent in 2025, the European Commission (EC) said in its latest forecast, released on Wednesday.
“Economic growth is projected to accelerate to 3.1 pct in 2024 and 3.7 pct in 2025, mostly on the back of accelerating private consumption growth, helped by lower inflation, and a pick-up of investment,” the EC said in its report.
On the production side, all sectors are set to contribute positively to annual growth, with substantial contributions from agriculture and construction due to base effects from the drought and low construction activity in 2022. After the substantial positive effect in 2023, the contribution of net exports to growth is expected to be broadly neutral in 2024 and 2025, helped by increased export performance supported by recent foreign direct investment in the tradable sector.
As for the unemployment rate, the EC forecasts that it is expected to remain broadly unchanged in 2023. It is projected to return to a moderately declining path in 2024 and 2025, in line with some pickup in employment growth reflecting the economic recovery.
In terms of inflation, after reaching a peak of 16.2% year-on-year (y-o-y) in March, inflation has gradually declined to 10.2% y-o-y in September, helped in particular by decreasing pressure from food prices. Inflation is projected to decelerate further in the remainder of 2023 and throughout 2024, partly due to base effects and tighter financing conditions. After a slight increase in 2023, average annual inflation is expected to return to single digits in 2024 and to and in 2025.
The report also noted the eurozone would avoid recession in 2023, with its economy to grow by 0.2 pct in Q4 and 0.6 pct y-o-y.
(021.rs, 16.11.2023)