The World Bank had predicted better economic prospects for Serbia for 2020, and in the updated October report on the economic projections during the COVID-19 pandemic, it has corrected its original projection of Serbian GDP declining by 3.5%. In the new projection, the GDP decline is predicted at 3%.
As for the surrounding economies, the World Bank estimates that the biggest drop this year will be in Montenegro, up to -12.4%, and in Kosovo -8.8%.
WB also forecasts that Albania will record an 8.4% decline, Croatia 8.1%, Romania 5.7%, Bulgaria 5.1%, North Macedonia 4.1% and Bosnia and Herzegovina 3.2%.
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The World Bank says that the Serbian economy, after several years of solid growth, has also entered recession due to the pandemic that has paralyzed economies around the world. The immediate negative impact on the population and the economy was mitigated by a large tax aid which value was around 13% of the national GDP.
The World Bank adds that, thanks to that set of measures, there was no significant increase in unemployment and that the decline in the Serbian GDP in the second quarter of 6.4% (on an annual basis) was lower than that of neighbouring countries.
For the next year, the World Bank forecasts a more moderate growth of the Serbian economy at 2.9%, or 1.1% lower than the June projection, while estimating that the GDP growth will return to pre-pandemic levels in 2022-2023.
This medium-term perspective, according to the report, depends crucially on international developments, including the pace of the virus contagion, but also on the pace of structural reforms and political developments.
According to the Bank, the most important thing for Serbia is to continue to work to iron out the bottlenecks that prevent the growth of the private sector, that is, to remove obstacles to a better business environment and reduce red tape.
This post is also available in: Italiano