“The current lockdown in the EU economies will result in a lower influx of productions orders from the EU to Serbia, which will undoubtedly weaken the dynamics of domestic industrial production and most importantly lead to a decline in export activities,” Sasa Djogovic, author of Makroekonomska Kretanja paper, told Biznis.rs.
The lockdown, in which Serbia’s main economic partners currently find themselves, will reduce import of raw materials, but due to lower domestic consumption in December as a result of limited access to shopping malls and retail facilities in general, import of non-durable consumer goods will also experience negative dynamics.
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“All of this will spill over into the first month of 2021, as warehouses of both producers and retailers will have more unsold stock, while restrictive measures in most of the EU countries will certainly remain in place until at least mid-January. Moreover, with the closure of EU countries, the aggravation of the situation in Great Britain and the appearance of a new virus strain, tourism will suffer a new drastic cut in the number of overnight stays of foreign guests,” says Djogovic.
Fewer foreign guests, but also the closure during the Christmas and New Year’s holidays and people mostly spending time at home instead of travelling or shopping, will further influence the decline in retail trade and catering.
“All data point to the fact that tourism and catering will need additional financial injections, which could also be implemented through the cancellation of some taxes or parafiscal levies,” Djogovic concludes.
(N1, 23.12.2020)
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