A double-digit decline in Serbia’s GDP should be expected in the period April-June

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Professor of the Faculty of Economics in Belgrade Milojko Arsic estimated today that in the period April-June we should expect a double-digit decline in Serbia’s gross domestic product (GDP).
“On a strong reduction in activity in almost all economic activities, so that a double-digit decline in GDP should be expected in the period April-June. I expect that we will end the year ‘in the red’, or, as politicians prefer to say, with negative GDP growth of three percent,” said Arsić for the Nova portal.
He added that the relatively strong decline in economic activity that Serbia recorded in April was felt by other countries as early as March, so that the April results were expected, especially when it comes to industrial production or tourism.
“We do not have data for traffic yet, but we can assume that there has been a significant drop in activity,” said Arsic, adding that the only activities that were “spared” were construction and agriculture.
He said that he expects that the May statistics will be somewhat more favorable than the April ones, since some epidemiological measures have been mitigated during the month, which will probably “spill over” to June as well.
“However, in the second quarter, we should most likely count on a double-digit decline in GDP, so that in the next part of the year there will be a gradual recovery, which will certainly not cover all activities equally,” said Arsic.
According to him, unemployment in Serbia will grow throughout this and part of next year, even when the economy starts to recover.
“The postponement of employment growth was influenced by the measure of payment of the minimum wage to employers, so we will not record an increase in unemployment while it lasts, but layoffs will continue during the third and fourth quarters of this year,” Arsic said.
His estimate is that the state will have to borrow a total of 7.5 to eight billion euros this year.
“Although for now it is a matter of sustainable growth of public debt, from which other countries are not fleeing, which are trying to mitigate the consequences of the pandemic, next year we will have to reduce the budget deficit relatively abruptly. Of course, this is a pre-election period, so great promises are present,” Arsic said.
He added that, if such promises were realized, Serbia would face a high deficit next year and, consequently, further growth of public debt, Beta reports.

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