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EBRD lifts Serbia’s 2017 GDP growth forecast on rising demand - Serbia Business

EBRD lifts Serbia’s 2017 GDP growth forecast on rising demand

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The European Bank for Reconstruction and Development (EBRD) raised on Thursday its projection for Serbia’s 2017 economic growth to 2.9% from 2.7%.

“The main growth driver will be domestic demand, with investment growth supported by an improved business climate based on successful fiscal consolidation and ongoing structural reforms,” the lender noted in its latest Regional Economic Prospects report.

Serbia’s economy is expected to grow by 3.0% in 2018, as rising employment and wages will support a further consumption recovery, the EBRD said.

The main risks for the projection are tilted to the downside due to a high base from an extraordinary agricultural output in 2016, and a possible slowdown in fiscal and structural reforms, including the restructuring of state-owned enterprises, the bank noted.

“Medium-term prospects are favourable, but will depend on the pace of reforms envisaged in the current IMF programme, further improvements in the investment climate, support for NPL resolution and corporate restructuring to unlock credit growth, and acceleration of the implementation of major infrastructure projects”, the EBRD said.

Serbia’s economy grew by 2.8% in 2016, up from 0.8% a year earlier.

The EBRD predicts economic growth in Southeastern Europe (SEE) to stand at 3.1% in 2017 and 3% next year.