The economic growth of Serbia is below the level where it could potentially be due to weak institutions, especially the rule of law and corruption control, and is the biggest economic problem, the Fiscal Council of the Government of Serbia has announced. The next factor slowing down the economic growth, according to their analysis “Why the economic growth of Serbia is lagging behind”, are low investments, especially the insufficient private investments, primarily due to the weak rule of law and a high degree of corruption.
The Fiscal Council says in its analysis, which will be presented at the Kopaonik business forum, that the economic growth is also slowed down by the flaws in the education system.
– The economy of Serbia is currently growing at a rate nearly two percentage points below its potential, that is, at slightly over 3%, instead of the potential 5% – the Fiscal Council said.
A half of this, or one percentage point, according to the analysis, can be explained by the weak rule of law and the high corruption, whereas another half is down to low investments (0.7 percentage points) and the flaws in the education system (0.2 percentage points).
– The reforms in the rule of law and countering corruption, as well as a reform of education, are the basic requirements for Serbia to realize its potential growth – the Fiscal Council said.