On the penultimate day of 2020, the Republic Bureau of Statistics published an estimate according to which Serbia recorded a decline in GDP of 1.1%. Compared to the previous year, agricultural production increased by 4.4%, and the value of construction put in place decreased by approximately that percentage.
An important fact is that, despite everything, industrial production in 2020 increased by 0.2%. These data are based on the assessment that, as far as the fall of the economy is concerned, we will do best not only in the region but also much wider.
Compared to the assessment of official statistics and individual analysts, domestic and international institutions, of a decline of 1.1% or slightly higher percentage, the European Bank for Reconstruction and Development estimates a much deeper decline.
The head of the EBRD agribusiness team for Southeast Europe, Miljan Zdrale, says that our economists estimate that the decline in GDP in 2020 will be up to 3.5%, primarily due to the closure of the state of emergency, supply chain disruptions, lower inflows of foreign direct investment, reductions in remittances, as well as continuous public investment.
Waiting for official data on economic trends, which will confirm or deny the rise or fall, analysts seem never to be more cautious, presenting projections for 2021.
Miljan Zdrale has no doubt that in this year, which has just begun, thanks to vaccination, there will be an economic recovery.
However, he points out that the projections in this period are very questionable because it is not known how the pandemic will continue, and that the more important question is how much Serbia would have grown if it were not for the virus.
“We had a growth of around 4.4% in 2018 and 4.2% in 2019, and what is important for Serbia, as well as for all countries in transition, they should grow faster than saturated markets,” Zdrale points out.
Boldly or unrealistically, only the economic officials of our country estimate that the growth of the Serbian economy in 2021 could reach 6%. The European Commission forecasts our GDP growth at 4.8%.
This is not a very optimistic forecast, having in mind the positive signals coming from the Eurozone, explains professor from the Belgrade Faculty of Economics, Djordje Djukic.
“Massive packages of fiscal support, which were adopted after the consent of Poland and Hungary and will be realized in 2021, as well as the selfless support of the European Central Bank in the sense that it will keep the zero interest rate, tell us that there is a real note of optimism,” said Djukic.
He points out that the connection between German and Chinese companies, despite the geopolitical games that are always present, will play an important role so that the economy of the euro zone will record high economic growth next year.
We export almost two thirds of goods and services to the EU, and the growth of those countries will strengthen exports, which, according to official statistics, decreased by 3.5% last year.
Immunization of the population around the planet could return Serbian tourism to the path of growth, which in 2020 recorded 37.5% fewer overnight stays, and also increase revenues from transit.
Extensive construction work, higher foreign direct investment or the growth of the IT sector should also be a strong support for GDP growth. And all with a big if. Let us remember, namely, how fast the corona virus epidemic threw into the water all the macroeconomic projections for, not repeated, 2020, RTV reports.
