The year 2020 was extremely difficult for the Serbian economy, but it will end better than the international financial institutions predicted at the beginning of the crisis, the editor of the economic bulletin “Monthly Analysis and Trends” (MAT), Ivan Nikolic, told Biznis.rs.
He points out that the decline of the Serbian economy in the year marked by the coronavirus pandemic will be around one percent, which is without a doubt the smallest decline in GDP in Europe.
Such good results are a consequence of the generous package of assistance of the Government of Serbia for suppressing the negative consequences of the pandemic, but also the fact that the Serbian economy entered a crisis with high economic growth, budget surplus, while agriculture achieved a good result for the second year in a row.
Nikolic emphasizes that the package of measures of the Government of Serbia was extensive and that it corresponded to the economic potential of the Serbian economy. That aid of about a billion euros, or about 12.7 percent of GDP, was the largest in the region – below Serbia, with the help of the state in combating the negative consequences of the corona crisis, were the countries of the region that are in the EU, such as Romania, Bulgaria, Croatia and Czech Republic and Latvia.
On the other hand, Germany, for example, set aside aid of about 43 percent of GDP, but that still could not prevent a serious decline in the German economy in 2020. The fact is that state aid in most countries had an impact on preserving jobs and preventing a large number of companies from going bankrupt due to the crisis, and that the impact on the level of GDP decline was different.
Despite the crisis, Serbia has attracted 2.8 billion euros in investment.
Speaking about the economic year 2021, Ivan Nikolic emphasizes that it is very important for Serbia to maintain a high level of foreign investments. He pointed to the fact that Serbia, despite the crisis of the corona, managed to attract around 2.8 billion euros in investments in 2020, which is more than 60 percent of the total investments in the Western Balkans region. In a situation when in most countries in the region there has been a large decline in foreign investment.
He also emphasized that investments in transport infrastructure, both in road and railway, but also in energy, are very important for attracting foreign investments.
Nikolic pointed out that estimates, which could be called realistic, show that the economies of most European Union (EU) countries, but also the Eurozone, will return to pre-crisis levels only in 2022, and that the recovery of the European economy will be difficult and complicated. He believes that Serbia, if there are no major breakdowns, could approach the planned growth rate of six percent in 2021, although that is a challenge.
It is uncertain what the year will be like in agriculture, although a greater contribution of industry is expected, as well as construction, especially that part related to infrastructure works.
It is estimated that in that way, Serbia could return to the pre-crisis level in 2021, and that it would be among the few European countries that would do so in 2021, N1 reports.
