The National Bank of Serbia (NBS) announced that it expects the country’s economy to fully recover, estimating that the gross domestic product (GDP) will reach the pre-crisis level in the second quarter of this year and there will be between 5 to 6 percent growth.
“Slightly slower growth in the first quarter, due to the new pandemic wave and the closure of a large number of European countries, should be offset by a positive second quarter. If we add to this a good vaccination rate in our country and around the world, the annual growth rate could be closer to 6 percent,” the NBS said.
It is expected that growth will be driven by domestic demand and exports, for which the eurozone’s economic growth, currently estimated at around 4% in 2021, is required.
As it has been pointed out, the timely and appropriate response of economic policymakers in Serbia will contribute to the growth and, on this basis, favourable financing conditions will be provided and production capacities and jobs will be preserved.
“According to our assessment, the same factors will provide a stable medium-term economic growth in Serbia of around 4% per year in the coming years,” the report states.
The risks for 2021 are, on the whole, symmetrical and are mostly related to the course of the pandemic and the efficiency of its suppression, the NBS said.
At the same time, the risks from the international environment are more pronounced due to the new spread of the virus since October and the emergence of new strains, as well as the tightening of sanitary measures in many countries, especially in the euro area.
On this basis, the economic growth prospects of the most important external trading partners of Serbia are declining, mainly in the first half of the year.
“Given the announcement of a new economic aid package and the rapid pace of vaccination in our country, the recovery of domestic demand could be even faster than expected. Vaccination, and the fact that Serbia is among the leading countries in Europe and the world in terms of the number of vaccinated citizens in relation to the total number of inhabitants, instils optimism,” said the Governor of the NBS, Jorgovanka Tabaković.
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