During the annual Economic and Financial Dialogue among the European Union, Western Balkans, and Turkey, aimed at preparing these regions for EU accession, Serbia was recognized for its resilience in facing international challenges and maintaining macroeconomic stability amidst crises, as announced by the National Bank of Serbia.
Held in Brussels, the meeting saw the European Commission and the European Central Bank acknowledging Serbia’s notable economic growth acceleration in the latter half of the previous year, attributed to significant inflows from foreign direct investments and a slowdown in inflation. Growth projections for the current year indicate a GDP growth of 3.5%, with expectations of further acceleration, returning to pre-pandemic growth rates, primarily driven by investments and private consumption.
EU recommendations to the National Bank of Serbia include the continuation of current activities, particularly maintaining the restrictive monetary policy to ensure medium-term price stability, sustaining a robust regulatory framework in the financial sector, and preserving bank asset quality. Additionally, efforts to support dinarization through promoting foreign exchange risk protection instruments and long-term dinar financing sources are advised.
According to NBS Governor Jorgovanka Tabaković, foreign exchange reserves increased by nearly 30% in 2023, while exports of goods and services rose by 8%, despite subdued external demand. Dinar savings also saw a notable surge of 43%. The stability of the dinar against the euro remains a key factor in fostering investment and consumer confidence. With monetary tightening, reduced imported inflation, and anchored short-term inflation expectations, April witnessed a significant 11.2 percentage points drop in inflation compared to the previous year’s peak. Anticipated inflation is projected to enter the target corridor by May, approaching the central goal of 3% by year-end.
