The National Bank of Serbia projects, taking into account the effects of the pandemic and the measures adopted by the Government and NBS, the GDP to contract by around 1.5% in 2020 in real terms, and to increase by around 6% in 2021.
A positive contribution to GDP this year will come from net exports due to the expectedly higher drop in imports than exports, which will result in the narrowing of the current account deficit to around 5% of GDP, while domestic demand will be a negative contributor, the NBS says in the May inflation report.
The central bank says that, “after more than full recovery from the crisis next year, led by the recovery of investment and household consumption, we expect GDP to return to a stable and sustainable growth trajectory of around 4%.”
The risks to the projection are assessed to be symmetric given that the course of the pandemic is still uncertain, the NBS points out.
The risks from the international environment are judged by the NBS to be titled to the downside due to a possibly sharper fall in economic activity in the euro area, which has been hit hard by the crisis, while the risks from the domestic environment are titled to the upside, primarily due to the potentially more favorable than expected movement of investment.
– I believe we have shown we are able to recognize the challenges of the times and to steer our economy on the path of sustainable and accelerated growth, while ensuring a further rise in living standards. The NBS continues to keep a close eye on global developments and to analyze their impact on Serbia with a view to taking well-timed and appropriate measures to ease the conditions in which our businesses operate and our citizens live – said Governor Tabaković.