Serbia’s gross domestic product will amount to 2.3 percent this year

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According to the preliminary estimate of the Bureau of Statistics, Serbia’s gross domestic product will amount to 2.3 percent this year.

This means that GDP growth in the fourth quarter year-on-year was less than one percent.

As for the Serbian economy, the year 2022 was marked by dynamic growth in the first half of the year on the wings of economic recovery from the pandemic 2020 and growth of 7.5 percent in 2021 (by far the highest in the region) and a huge slowdown in the second half of the year.

GDP growth in the first half of the year compared to the same period last year was four percent, in the first quarter 4.2 percent, and in the second quarter 3.8 percent.

However, since June, the effects of the war in Ukraine, the rise in energy prices and problems in own electricity production, the drought and a major decline in construction began to be felt, so the annual GDP growth in the third quarter amounted to only one percent, only to further slow down in last quarter.

The value of construction works in 2022 recorded a real drop of 11.8 percent compared to the previous year. Turnover in retail trade increased by 6.4 percent in real terms, while turnover in wholesale trade was nominally higher by 19 percent (in real terms, when inflation is excluded, about four percent).

Exports increased by 23.5 percent, and imports by as much as 33 percent.

Investment growth this year is 0

Hospitality increased by 40 percent in real terms compared to last year, and the number of overnight stays by tourists by 37.5 percent, according to data from the Bureau of Statistics.

After the growth of investments of 15.9 percent last year, this year they have stagnated, i.e. the growth is zero.
From one of the fastest growing economies in the region at the beginning of the year, Serbia has become an economy with one of the lowest growth rates this year.

The better result of the surrounding economies this year is largely a consequence of their slower recovery from the recession in 2020. While Serbia already regained its lost GDP at the beginning of 2021, many of these countries achieved this only at the end of 2021 or even at the beginning of 2022.

In addition to Serbia, which will record a growth of 2.3 percent this year, the Central Bank of Albania forecasts a growth of 3.7 percent, Bulgaria (according to the November projection of the European Commission) 3.9 percent, and Bosnia and Herzegovina (estimated by the Central Bank of Bosnia and Herzegovina) 4.1 percent.

5.5 percent is forecast for Hungary this year (EC), and for Croatia from six percent (EC) to 6.3 percent (Croatian National Bank). According to the EC forecast, Romania will reach 5.8 percent this year, and Slovenia 6.2 percent.

In any case, the great economic slowdown will continue in the coming year, and almost no one in the region will reach growth of two percent, which is not surprising considering that the Eurozone is estimated to be only 0.3 percent, and Germany, the largest European economy, will have a recession of 0.6 percent. 

Estimated economic growth of 2.5 percent next year

The Serbian Ministry of Finance has estimated economic growth of 2.5 percent next year, and that would be the best economic result in the region if it were to be realized. However, some financial institutions, such as the Austrian Erste Bank, estimate Serbia’s growth next year at 1.6 percent, and the authors of the Quarterly Monitor at two percent, with a greater chance of it being lower than higher than that.

A barely perceptible growth of 0.1 percent is forecast for Hungary in 2023, and 0.8 percent for Slovenia.

Croatia is expected to slow down to one percent according to the EC’s estimate, while the CNB expects 1.4 percent next year.

The Central Bank of BiH expects growth of 0.9 percent, and the European Commission for Bulgaria expects 1.1 percent. Romanians with 1.8 percent and Albanians with two percent are the closest to our expected economic growth, BiF writes.

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