The National Bank of Serbia estimates that the macroeconomic state of Serbia is better than what has been projected by analysts and institutions in the past few years. An industrial growth has been recorded, especially in manufacturing, but also in the construction and the automotive industries.
The growth of GDP in 2015 amounted to 0.74%, whereas a growth of 2.5% is expected in 2016 and of 3% in 2017, the Governor’s cabinet states. The reason for improvements in this period was increased investing in less export-oriented projects. External imbalances were reduced and risks that could hamper the growth mitigated.
The projection of the growth of GDP in 2016 was revised upwards, considering the favorable trends since the beginning of the year.
The largest contribution to the growth of GDP in 2015 and 2016 came from investments, mostly those import-oriented, as well as the growth of the import of equipment, newly approved investment loans and the construction sector indicators. The net inflow of foreign direct investments in the past 18 months amounted to EUR 2.6 billion.
Industrial production increased by 6.1% y-o-y in the first half of the year, mostly led by manufacturing rather than the base effect in mining and energy sectors. At the same time, the growth of export of goods and services continued throughout the first six months and amounted to 10.5% y-o-y. Within manufacturing, a rise in production was recorded across 18 and higher exports across 19 of 24 branches.
The construction sector also influenced the growth of production, as it was the fastest growing sector in the first half of 2016 at 10% y-o-y, as confirmed by numerous other indicators. The number of building permits issued in the period rose by 12.2%, the value of performed works by 11.2% and production of construction material by 12%.
This was facilitated by new legal solutions in the area of construction and a more successful realization of government investments – consolidated capital expenditures increased by over 40% in the first half of 2016.
The central bank expects that GDP will grow by 3% in 2017 and that it will be influenced by the industry, construction and certain service sectors, recovery in consumption and further investment and net exports.
The NBS has taken into consideration the decline in production in Fiat Kragujevac, but points out that other smaller companies from the automotive sector are important exporters. Although the export of cars has reduced, the NBS recorded a growth of the export of motor vehicles and car components in the first two quarters in the amount of EUR 85 million.
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