EBRD keeps 2025-2026 growth projections for Serbia at 4 pct

LONDON - The European Bank for Reconstruction and Development (EBRD) has retained a 4 pct growth projection for Serbia for 2025 after the country's economy rose by 3.8 pct in 2024, in line with the bank's earlier projection.

The 2026 growth rate, too, is expected to remain at 4 pct, as also projected in September, the EBRD said in its latest Regional Economic Prospects, released on Thursday.

"GDP is expected to grow by 4 pct in 2025 and 2026. Global geopolitical tensions and uncertainty regarding trade tariffs constitute the main downside risks, potentially constraining Serbian exports and FDI inflows to Serbia. On the other hand, significant capital investments related to the Expo 2027 may boost growth. At the same time, a tighter labour market and a potential slowdown of structural reforms against the backdrop of ongoing political tensions pose downside risks," it said in the report.

"Preliminary estimates put growth in 2024 at 3.8 pct, unchanged from 2023. The main drivers of growth were services, particularly trade, tourism, and construction, while household consumption and investments provided the strongest boost to demand. On the other hand, net exports made a negative contribution to growth due to higher imports of goods on the back of easing inflation. The budget deficit, at 2.2 pct of GDP, was lower than planned. However, the current account deficit expanded to 4.3 bln euros in January-November 2024, up from 1.1 bln euros in the same period of 2023. The widening of the current account deficit was offset by a record FDI inflow of 5.1 bln euros in 2024," the EBRD also said.