Serbia’s economic recovery and growth of its GDP continue, and in the second quarter of 2021, it amounts to 1.3 percent in relation to the first quarter, it was published in the publication “Quarterly Monitor”.
In their 65th quarterly report, the authors of the publication point out that the economic recovery has continued throughout Europe, so that the countries of Central and Eastern Europe (CEE) recorded an average growth of 2.3 percent, and the countries of the European Union 2.1. Also, it is stated that in relation to the second quarter of 2020, Serbia in the second quarter of this year achieved a growth of 13.7 percent, CEE countries 11.7, and the EU 14.2 percent.
The bulletin “Quarterly Monitor”, published by the Faculty of Economics and its Foundation for the Development of Economic Science, emphasizes that Serbia is in a smaller group of countries that exceeded the pre-crisis level from the fourth quarter of 2019. Compared to that period, Serbia has a higher GDP by 2.3 percent, while the CEE countries are below that level by 0.2 percent, and the EU countries are 2.3 percent below the GDP from the fourth quarter of 2019.
The authors of the Quarterly Monitor corrected the growth of the GDP of Serbia in 2021 from 6 to 6.5 percent.
“All economic activities, except agriculture, have strong growth. Trade, transport, tourism, catering and industry are recovering from the coronavirus crisis, while the IT sector, telecommunications and communication services continue to grow from pre-crisis times,” the analysis of the “Quarterly Monitor” states. It is pointed out that imports and exports are higher than in the time before the crisis, but investments are smaller, which, as they believe, could jeopardize growth in the coming period. Industrial production in Serbia fell by 2.8 percent in the second quarter, but increased by 15.9 percent compared to the second quarter of last year.
The unemployment rate in the second quarter fell 11.1 percent from the previous one. Informal unemployment dropped to 12 percent, and until a few years ago it was 20, reminds “Quarterly Monitor”. Also, as it is stated, the registered employment increased by 3.3 percent, of which 4.9 percent in the private sector, and 0.5 in the public sector. Employment is growing in most industries, mostly in the IT sector, telecommunications and media 11.6 percent, in construction six percent, trade 4.9 percent and manufacturing 4.6 percent.
According to the authors, wages increased by 6.6 percent compared to last year, but this year they stagnate with only 0.3 percent growth compared to last quarter. This is, as it is stated, a consequence of inflation, which reached 4.3 percent in August and which, as expected, will continue to grow, as in the whole world. Also, it is stated that earnings are growing much faster in the private sector than in the public one.
The external deficit in the second quarter amounted to 570 million euros, or 4.4 percent of GDP, and its growth is expected in both the third and fourth quarters, mostly due to the foreign deficit.
Foreign investment is coming
There is still a high inflow of foreign direct investments, which amounted to 731 million euros in the second quarter, and are a consequence of subsidies, low labor costs and educated labor force, according to the “Quarterly Monitor”.
External debt reached 28.3 billion euros in August, which is 57.6 percent of GDP, but the state borrowed more than a billion euros in September, so that the debt now amounts to 29.5 billion euros, the authors of the “Quarterly Monitor” state, noting that it is favorable that GDP grows faster than debt, Dnevnik reports.
