Serbia’s economic recovery is accelerating, with private demand reviving and total investment increasing, and the growth rate is expected to reach 6 per cent in 2021, after which it will return to around 4 per cent in the medium term, the World Bank said in its report for the Western Balkans.
According to the statement, the growth this year was stimulated by a new package of financial incentives, the fiscal deficit gradually decreased during 2021, and good export results helped keep the current account deficit below the projected.
The World Bank expects that consumption will remain the main driver of GDP growth in the medium term, while net exports will continue to make a negative contribution to economic growth.
“In order to unleash its development potential and enable the creation of new, quality jobs, Serbia needs to remove structural bottlenecks related to the administration, labor market, infrastructure and tax system,” said Nikola Pontara, director of the World Bank office in Serbia.
“A green transition, based on more efficient use of raw materials and energy, expansion of green industries and technologies and promotion of a more energy-efficient economy that produces less pollution, can help Serbia build an environmentally clean and resilient economy,” Pontara said.
Serbia will maintain macroeconomic stability in the medium term, while inflation – despite the acceleration in the past few months – is expected to return to the target range of the National Bank of Serbia, according to the World Bank.
The poverty rate in the region, according to projections, will return to the trend recorded before the outbreak of the pandemic and will decrease by about 1 percentage point, to 20.3 percent, similar to the level from 2019, the World Bank announced and warns that the recovery is still threatened.
The World Bank emphasizes that women and young people were particularly affected during the recession, with the youth unemployment rate rising to 37.7 percent in 2021, Dnevnik reports.
