The economic growth in Serbia this year will be at 2%, and there are risks of its being even lower, the authors of the Quarterly Monitor newsletter say.
At the presentation of the new issue of the newsletter, it was said that the risks to achieving the projected economic growth are the bad agricultural season, a slower drop of inflation, higher energy prices and the deepening of the crisis in Europe.
“Negative trends dominated the Serbian economy in early 2023. Economic activity was stagnating, the inflation grew until March, the employment rate is only slightly growing, the real average salaries are dropping, the external deficits are lowered, the credit activity is slowing down and the interest rates are growing”, the publication says.
It is estimated that the inflation in Serbia, which stood at 14.8% in May, could drop to between 9 and 10% by the end of the year, whereas the official projection is that it will be 8%.
The decline in inflation is supported by the drop in the global prices of raw materials, food, metals and energy sources. Also, the National Bank of Serbia has been tightening its monetary policy by increasing the benchmark policy rate.
“The key macroeconomic challenge of Serbia is a relatively quick and perceptible decline in inflation. In order to achieve this, there has to be a strong coordination of the fiscal and monetary policies. For now, only the monetary policies are going in that direction,” it is said in the newsletter published by the Faculty of Economics in Belgrade and its Foundation for the Advancement of Economics (FREN).
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