The not so creditable economic results in the first two quarters od 2019 brought up the question of the planned growth rates for the year but, it seems like the thrid quarter brought outstanding results and saved the situation. Official Statistical results showed that real GDP growth in the third quarter of 2019 was 4,8 percent compared to the same period last year. It seems like „Turkish Stream“ has a lot to do with the improvement of these results.
In terms of industries, the construction of „Turkish Stream“ takes all the credit for the construction industry to bring such a significant growth in gross value added (34,7 percent).
The information and communication sector (7,7 percent) comes right after, followed by the wholesale and retail trade, repair of motor vehicles, transportation and storage and also accommodation and catering services (5,4 percent).
The National Bank has estimated the GDP growth for 2019 to be around 3,6 percent, while some officials have estimated no more than 3,5 percent. In order to understand why the results were not very promising at the begginig of the year, it is good to mention that economic growth was 2,8 percent in the first half of the year, up for 2,7 percent in the first and 2,9 in the secong quarter. Statistics show that that the GDP growth in the third quarter is 2,2 percent higher comparing to the previous quarter. No wonder why the third qaurter has fullfilled the yearly expectations so far.
A professor at the Faculty of Economics in Belgrade said that this is the effect of the construction of the „Turkish Stream“. However, as this construction will be finished by the beginning of next year, this will have impact on the GDP for short time period. He also stated that it is surprising that growth in gross value added outweighs wage growth as in gross value added in construction, most of it is in earnings. According to the movement of wages, the growth in construction was similar, which increased by 20-25 percent in mass and not nearly 35 percent, as the statistics show.
All of the above mentioned leads us to a conclusion that, whether economic growth will amount to a planned 3,5 percent or more this year, it is still low economic growth and that Serbia is at the bottom among European countries in terms of economic development and living standards.
Lead Economist of the Fiscal Council, while commenting about the budget for the next year, said that economic growth of 4 percent in a quarter is only an exception and a consequence of short terms factors, and that the long-term trend of growth of the Serbian economy will be 3 to 3,5 percent by the end of the year. He also stated that GDP per capita in Serbia is half of that in Central and Eastern Europe (CEE) and is only at one third of the level of developed countries in Western Europe. Even though Serbia should gradually make up for these backlogs with faster economic growth, this is not happening. CEE countries have experienced significantly faster economic growth in the past decade than Serbia and have further pushed it forward in economic development. In conclusion, Serbia’s economic growth should not be compared with economically developed European countries such as Germany or the Netherlands, as European countries with lower levels of development have to have significantly higher growth rates.