Maybe without an economic downturn this year – in six months, the gross domestic product is lower by 0.6 percent than in the same period last year.
When online talks with the International Monetary Fund (IMF) begin on Monday, as part of the current arrangement popularly called the “guard house”, which ends in January 2021, the Ministry of Finance is waiting for them with the good news that there may be no economic downturn in Serbia that it will amount to one percent. We will see at the end of these two-week online talks what the IMF’s position on this will be. As a reminder, their predictions were that Serbia would have an economic decline of three percent of GDP, which was announced in the spring, and which they did not change later.
When the budget was rebalanced at the end of April, the Ministry of Finance made new parameters in the state treasury with predictions of a drop of 1.8 percent. The National Bank announced in August that it is possible that the economic decline by the end of the year will be 1.5 percent of GDP, and even lower than that.
A few days ago, the Minister of Finance, Sinisa Mali, informed the Fiscal Council that the results in 2020, according to current data, are better than planned, and that Serbia is expected to end this year with economic growth that will be between minus one and zero percent. A similar conclusion is the session of the Council for Coordination of Activities and Measures for GDP Growth, which was previously chaired by Prime Minister Ana Brnabic.
After a growth in the first quarter of five percent, GDP fell by 6.4 percent in the second quarter, so that the result for six months is minus 0.6 percent. The situation has improved, so in the first eight months, the decline in industrial production was only 0.7 percent compared to the same period last year, according to official statistics.
Indicators both in the world and in our country indicate that the economic recovery is somewhat faster than expected, and economists have repeatedly pointed out that the smaller economic decline in our case is not only a consequence of otherwise well-applied state measures but the structure of the domestic economy. The Serbian economy relies to a greater extent on the production of existential products for which the demand has not dropped significantly in the crisis, such as agriculture, food industry, and household chemicals.
At the session of the Council for Coordination of Activities and Measures for GDP Growth, the most important economic results were analyzed, as well as the progress on the most important projects for the Serbian economy, and due to good results, the Ministry of Finance and one percent.
– The goal is for Serbia to be among the leading countries and economies in Europe in terms of economic growth in 2020, and we are on the right path – Prime Minister Brnabic pointed out.
The Prime Minister added that the news that we have achieved success in the previous three quarters of this year will have significant positive effects on our economy.
In August, the results were better than expected, despite the pandemic caused by the corona virus, the government announced. Also, Serbia recorded a significant growth of industry of 4.2 percent, while the results in the agricultural sector are better than expected, which means that this year will probably be a record in agricultural production.
The labor market continued to grow steadily, so that the number of employees in August was higher by 1.8 percent compared to August last year. Although a decrease in the number of foreign tourists who visited Serbia was expected, there was an increase in the tourism sector in the number of domestic tourists, by more than 25 percent. The government continues to implement all projects that, despite the pandemic, have not been interrupted.
Given the positive trend and rapid recovery of the economy, the goal is that Serbia, with the efficient continuation of planned projects, does not have a fall in GDP this year, which would be a historic result and probably the best economic result in Europe, the statement said.
Whether the IMF will share this optimism, we will see, however, the European Bank for Reconstruction and Development (EBRD) kept its earlier forecast that Serbia will have the smallest drop in GDP in the region of 3.5 percent this year.
– Serbia definitely had a significantly smaller drop in GDP in the first half of the year than other countries in the Western Balkans and Central and Eastern Europe – the chief economist of the EBRD for the region, Peter Tabak, told Tanjug.
Tabak also does not rule out the possibility that Serbia will be among the leading countries in Europe in terms of economic growth in 2020. However, he points out that this cannot be known with certainty at this time due to unpredictable circumstances related to Covid.
– We do not rule out that possibility, but it will depend on several factors related to the Covid 19 epidemic, which we cannot fully predict at the moment. However, for next year, we have revised the forecast to three percent (compared to the previous six percent) of Serbia’s GDP growth – said Tabak, adding that they did it because of the return of the Covid 19 epidemic in many countries that are important export partners of Serbia, Politika reports.
