The economic recovery of Serbia is accelerating, with a revival of private demand and an increase in total investments, and the growth rate is expected to reach 6% in 2021, following which it will return to around 4% in the medium-term, the World Bank said in its Regular Economic Report for the Western Balkans.
According to the announcement, this year’s growth is driven by a new financial stimulus package. The fiscal deficit gradually dropped during 2021, and the good exporting results have helped the current account deficit remain below the projection.
The World Bank expects consumption to remain the main engine of the GDP growth in the medium term, whereas net exports will still give a negative contribution to the economic growth.
– In order to release its development potential and enable the creation of new, quality jobs, Serbia needs to remove the structural bottlenecks in the administration, the labor market, the infrastructure and the tax system – says the World Bank County Manager in Serbia, Nicola Pontara.
– Green transition, based on a more efficient use of raw materials and energy sources, the expansion of green industries and technologies and the promotion of a more energy efficient economy, which produces less pollution, can help Serbia build a clean and resilient economy – Pontara said.
In the medium term, Serbia will retail macroeconomic stability, whereas the inflation, despite the acceleration in the past few months, is expected to go back within the targeted band of the National Bank of Serbia, the World Bank estimates.