Four important economic developments

With Germany entering recession and Serbia experiencing a significantly smaller growth of its industrial production, here are five important economic events to look out for:

  1. Fiat Panda produced in Kragujevac could revive Serbian production

Starting this month, we can expect significantly more modest year-on-year growth rates for the overall industry in Serbia, according to the January edition of Macroeconomic Analysis and Trends (MAT) magazine. A short-term revival of the processing sector in the circumstances of a marked economic downturn in the Eurozone is unlikely. A positive reversal of the trend in the second half of 2024 is possible if mass production of the brand new Fiat Panda model were to be launched in Fiat’s plant in Kragujevac.

  1. Infrastructure in the Western Balkans is 50 percent below the EU average

According to the International Monetary Fund (IMF), the average infrastructure development in the Western Balkans is about 50 percent lower than the average of the European Union (EU), and existing bottlenecks hinder economic integration into world value chains. Kyriacos Kakouris, vice president of the European Investment Bank (EIB), said that the shortcomings of public infrastructure in the Western Balkans continue to be an obstacle to faster private sector development, economic prosperity and integration into the single European market.

“Well-defined public infrastructure development, together with stronger frameworks for investment management, could significantly increase the efficiency of public spending and help leverage the financial support of the EU, international financial institutions and donors,” Kakouris said.

  1. A recession is hanging over Germany

The industrial production volume in Germany unexpectedly fell in November 2023 again, thus again showing how much trouble Europe’s largest economy is in. Production declined by 0.7 percent compared to October and the largest decline was recorded in the capital goods and intermediate products production sectors, the German statistical office said. This was the sixth consecutive decline.

  1. Is the Adria region also going to experience a recession?

 Economist at the Vienna Institute for International Economic Studies (WIIW) Branimir Jovanović believes that Eastern Europe leads the continent in terms of economic growth and therefore the probability of recession, according to WIIW projections, is lower than in Western Europe.

The Western Balkans region ranks best in the eastern part of the continent.

“Unfortunately, Serbia is one of the weaker countries in terms of economic growth, i.e. in the lower half in terms of Western Balkan countries. So the probability of Serbia experiencing recession is slightly higher than for the entire Western Balkans. Bosnia and Herzegovina is in a similar situation as Serbia, while North Macedonia is in a slightly worse situation,” said Jovanović.

(Bloomberg Adria, 10.01.2024)

https://rs.bloombergadria.com/ostalo/opste/49605/mnogo-toga-zavisi-od-pande-i-bolje-infrastrukture/news/

This post is also available in: Italiano

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