Global crises threaten Serbia’s strong economic recovery
BELGRADE, Serbia, May 4 (SeeNews) – Serbia’s economic growth will slow to 3.2% in 2022, despite a previous forecast of 4.4%, as several global crises, including the war in Ukraine, weigh on the global economy, the World Bank said on Wednesday.
The country will maintain macroeconomic stability despite significant downside risks that could materialize in 2022, while inflation is expected to pick up further, fueled by rising global food and energy prices, the World Bank said. in a statement after the publication of its latest regular economic report on the Western Balkans. .
“In the medium term, the Serbian economy is expected to grow steadily at around 3% per year, which is similar to the growth levels achieved before the pandemic,” said Massimiliano Paolucci, World Bank country director for North Macedonia. and Kosovo.
The outlook largely depends on external factors, such as the ongoing war in Ukraine and the global energy crisis, but also on the pace of Serbia’s internal reforms to put state-owned companies on a solid financial footing, he added.
Serbia’s budget deficit could be higher than expected due to slower growth and increased public funds that will be needed to support crisis-affected electricity and gas companies in the form of grants and subsidies. guarantees, the World Bank said.
In its Global Economic Prospects report published in January, the World Bank predicted economic growth of 3.2% for Serbia in 2022.
Economic growth in the Western Balkan region is now forecast at 3.1% in 2022, down from the 4.1% estimate in January. The region’s GDP growth reached 7.4% in 2021, following a contraction of 3.2% in 2020.