bne IntelliNews – Serbian central bank raises GDP growth forecast for 2021

The National Bank of Serbia (NBS) has raised its forecast for the country’s GDP growth this year to 6.5%, from 6% in May.

While it has contracted in the last three quarters of 2020, the impact of the coronavirus pandemic on Serbia’s economy has been relatively moderate compared to others in the Eastern Europe region. South East. The economy returned to year-on-year growth in the first quarter of 2021, and growth accelerated to 13.4% in the second quarter.

“Based on the indicators in the first six months and the expected movements in key sectors of the Serbian economy by the end of the year, we have revised upwards our economic growth projection for 2021, from 6.0% to 6.5%, ”the SNB said. in its August inflation report.

Based on an analysis of planned investment projects in road, rail, energy and utility infrastructure over the next ten years and their direct and indirect effects on other sectors of the economy, the bank Central also revised the medium-term economic growth projection from 4% to the 4-5% range.

The central projection for medium-term GDP growth now stands at 4.5%, while the overall risks to the projection are seen to be symmetrical, according to the report.

According to the new SNB projection, taking into account the estimated effects of planned infrastructure projects, the share of construction in GDP in the medium term is expected to reach around 7% instead of the 6% previously expected, and the growth of this sector is expected to have a positive impact on growth in industry, commerce, transport, tourism, catering, finance and real estate.

The share of total fixed investment in nominal GDP over the next few years is expected to exceed 26% and remain at a high level. Improving the quality of infrastructure will have a positive impact on the productivity of the overall economy and the maintenance of a significant inflow of FDI, thus creating the conditions for the sustainability of the projected growth in the medium term, said the SNB. .

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