Serbia definitely had a significantly smaller drop in GDP in the first half of the year than other countries in the Western Balkans and Central and Eastern Europe, EBRD chief economist for the region Peter Tabak told Tanjug exclusively.
Tabak also does not rule out the possibility that Serbia will be among the leading countries in Europe in terms of economic growth in 2020.
He points out, however, that this cannot be known with certainty at this time due to the unforeseen circumstances surrounding the Covid-19 pandemic.
We do not rule out that possibility, but it will depend on several factors related to the corona virus epidemic, which we cannot fully predict at the moment, said Tabak.
Regarding the publication of the September EBRD Report on Regional Economic Outlook, and the fact that the decline in Serbian GDP in the first half of the year is 0.6 percent, the EBRD expert says that the bank kept its earlier forecast that Serbia will have the smallest GDP decline in the region of 3.5 percent this year.
However, for next year, we have revised the forecast to three percent (compared to the previous six percent) of Serbia’s GDP growth, Tabak said, adding that they did so because of the return of the oCvid 19 epidemic in many countries that are important export partners of Serbia.
He notes that they are still investigating the negative effects of the coronavirus epidemic in previous months in Serbia, which could have negative effects on the economic recovery.
In its report on the GDP growth forecast for 2021, the EBRD reduced the estimates of all economies in the region due to uncertainty and negative risks related to the potential aggravation of social distance measures due to the outbreak of Covid-19 virus both domestically and in key trading partners.
He noticed that there are no harsh measures at the moment, but that the movement of people is still limited, which will certainly affect the economy.
Tabak points out that Serbia had a smaller drop in GDP in the first half of the year due to several factors, and that the biggest influence on that was the relatively large program of government assistance and the fact that it was adopted on time.
This is a package worth about 10 percent of the country’s GDP, Tabak pointed out, adding that the smaller decline in Serbia’s GDP was influenced by last year’s positive effects, but also by strong public investments and spending in the first half of 2020.
According to him, the state aid package to the private sector was comprehensive and focused on short-term first aid measures, within which it helped companies to pay minimum wages, provided a guarantee scheme for small and medium enterprises, aid to certain specific sectors, and financial aid to citizens and more.
Those important measures helped immediately and mitigated the effects of the crisis, Tabak estimates, although, as he adds, some measures could have been better targeted and targeted at the people who need help the most.
But overall, the package was large and provided significant assistance to the Serbian economy, Tabak stressed.
He says that Serbia started well in the first half of the year, and a recovery is already visible in some sectors, for example in retail and industry.
Tabak adds that, after all, tourism is still quite affected, despite the large consumption of domestic tourists, so that a complete recovery is not expected in that branch of the economy this year.
An EBRD expert tells Tanjug that some traditional sectors, such as agriculture, but also some new ones, such as IT, have good potential for development in the Serbian economy, where Serbia has strong export growth and great potential for further development.
He adds that the growth of the IT industry in Serbia was contributed by a good business environment, which was achieved by changing certain laws that provided better conditions for the development of startup companies.
According to him, the most important thing is for the Serbian authorities to focus on the future now and for the reforms to continue in order to make Serbia even more attractive for foreign and domestic investors.
Tabak says that due to the pandemic, there will be a redistribution in the production and organization of large supply chains in Europe, which Serbia and other countries in the Western Balkans could use because they are geographically closer to Western countries.
“Serbia is becoming more and more attractive and its business environment is getting better. It is important now that the state focuses on cutting red tape, improving the tax system, as well as the efficiency of public administration.”
He especially pointed out that the management of state-owned companies, which he says are important players in the Serbian economy, which are an important service to the private sector, should be improved, Dnevnik reports.
