GDP in free fall; the biggest since World War II

The editor-in-chief of the magazines Biznis and Ekonometar, Radojka Nikolić, said that the GDP decline this year will be 6% at the global level and 8.7% in the EU.

Serbia is most affected in the branches such as metal processing and automotive industries, tourism and transport, Nikolić said.

The European Commission expects that the European economy will suffer the heaviest decline since World War II in the second quarter of this year. Nikolić also said that the decline was immediately felt everywhere, including Serbia, and the European Commission and the IMF projections confirm this trend.

“This is a huge economic earthquake. Even if the next year’s growth is between 4 to 6%, it will not annul the consequences of the decline, so can reach the level from 2019, probably only in 2022,” Nikolić underlined.

“We will lose two years, which is bad for underdeveloped economies like ours,” she added.

She went on to say that the shock is felt more in tourism and traffic, as well as in the crude oil industry. “If we look further ahead, the metal processing and automobile industries are the most affected as the Smederevo steel mill and Fiat are the two biggest Serbian exporters”.

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The list of the 10 most important exporters includes all foreign companies operating in Serbia, except Petrohemija. Nikolić added that they are dependent on their parent companies.

“Remember, Smederevo steel mill has already closed one furnace because there is no demand for steel and they will produce less, while only a few Fiat workers have returned to their jobs.

The outlook is bad, the economic future is not exceptional this year and the recovery will not be able to compensate for what we have lost,” continued Radojka Nikolić.

She believes that it would be useful for the most affected sectors to get even more state aid and estimates that the country will still owe 7 billion euro to foreign creditors, not to mention that the public debt is increasing and the earlier budget savings have been spent.

“All the countries in the world are taking out loans, it’s the only way to mitigate the current situation,” she concluded.

(Kamatic, 15.07.2020)

This post is also available in: Italiano

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