The World Bank has increased Serbia’s economic growth forecast for 2021 by 1.9% to 5%.
This is stated in the updated report on the economic prospects for Europe and Central Asia.
The international financial institution also improved Serbia’s gross domestic product (GDP) growth projection for 2022 by 0.3%, to 3.7%.
In a previous January report, the World Bank predicted Serbia’s growth of 3.1% this year, and 3.4% in 2022.
The Serbian economy recorded a small recession of minus 1% in 2020 thanks to a significant program of fiscal stimulus of about 13% of GDP, the report said, noting that the result was significantly better than the World Bank had predicted (a drop of 3%).
The document adds that the state’s fiscal support to the economy and citizens has resulted in no significant increase in the poverty rate, which is estimated to be close to the 2019 level.
The World Bank notes that there are still negative risks, primarily related to uncertainties in the external environment, but points out that the Serbian government has already announced a new program of fiscal incentives worth about 5.1% of GDP, to stimulate economic growth in this years.
In the medium term, this international creditor expects Serbia to grow by about 4.0%. He believes that growth will be driven by consumption, and that investments will recover somewhat more slowly, which could affect the slowdown in employment and wage growth.
This medium-term perspective crucially depends on international developments, including control over the development of the Covid-19 pandemic, then on the speed of structural reforms and political opportunities, the World Bank estimates.
The immediate focus of the state should be on measures to improve the business environment and management, in order to reduce business costs, provide security, as well as efforts to improve the quality of infrastructure, the report concludes, Tanjug reported, Vesti Online reports.
