“The real GDP growth of 2.5 percent, as estimated by the Republic Statistical Office achieved in Serbia this year, aligns with the projection of the National Bank of Serbia (NBS), as announced by the central bank. It was noted that the growth in activity was realized across all manufacturing and service sectors.
The physical volume of industrial production increased by 2.4 percent, thanks to a robust recovery in the energy sector, which increased production by 12.5 percent. Additionally, a growth in production of 0.5 percent was recorded both in mining and in the manufacturing industry, which demonstrated resilience amidst the slowdown in external demand.”
“When it comes to other sectors of the economy, agricultural production increased by 9.0 percent, similar growth dynamics were observed in construction, where the real growth in completed construction works reached 8.9 percent, primarily driven by intensified infrastructure project realization.
This growth has also led to a real increase of 3.5 percent in total fixed investments, aided by a significant inflow of foreign direct investments, which are expected to remain around the record levels seen in 2022, continuing into 2023.
Within the service sectors, there was a recorded growth in activities, indicated by the real growth in turnover in hospitality by 8.8 percent, a physical volume increase in transportation by 21.3 percent, and a 1.9 percent rise in tourist overnight stays, surpassing the real decrease in retail trade turnover by 1.8 percent.
Favorable trends continued in the labor market, marked by further employment growth, reduced unemployment, and increased wages. The average wage nominally increased by 15.0 percent this year, with its real growth aligning closely with the real GDP growth at 2.6 percent, confirming the sustained purchasing power of the population.
Throughout 2023, the unemployment rate remained relatively stable, averaging around the previous year’s level. According to the Labor Force Survey data, in the third quarter, the unemployment rate stood at 9.0 percent, while the employment rate during the same period was 50.7 percent.
The average annual inflation in 2023 reached 12.1 percent, with the year-on-year inflation in December recorded at 7.6 percent, which is half the rate compared to the end of 2022. Year-on-year inflation has been declining since the second quarter, in line with the NBS projection, attributed to monetary policy measures, alleviation of global cost pressures, reduced import inflation, and a good agricultural season.
Regarding core inflation, it remained significantly lower than overall inflation throughout the year, partly due to the prolonged relative stability of the exchange rate. In terms of external trade movements, commodity exports expressed in euros are expected to increase by 4.0 percent in real terms, maintaining sectoral and geographic diversification, underpinned by foreign direct investment inflows, reflecting a positive outcome despite the economic slowdown in the eurozone, our most significant trading partner.
On the other hand, highlighted by the NBS, merchandise imports expressed in euros are projected to decrease by 6.0 percent, primarily due to reduced energy imports, particularly a decrease in import prices from the record highs observed in the previous year.”
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