Serbia's GDP to drop this year too - expert

Serbia's GDP to drop this year too - expert

An ample room has been left in the 2015 budget for spending, which will have to be reduced in the current fiscal consolidation, so it is likely that there will be a review of this year's budget, Stamenkovic noted.

Serbia will continue increasing its debts, either by issuing eurobonds or bonds in the domestic market, he said.

He added that a 6.5 percent slump in industrial production in 2014 could only partly be attributed to the adverse effects of the devastating floods.

However, last year's 13 percent fall in the processing industry is a consequence of the decline in demand, investment, and frequent insolvency of the economy, he said.

In 2014, only three out of 10 industries registered a growth -pharmaceutical, food and non-metal industry, Stamenkovic said.

“We are entering 2015, with a stable upward trend in the food industry which accounts for one-quarter of the processing industry,” he added.

The food industry registered an increase of around five percent in 2014, ranking second in the value of exports with around EUR 1.3 billion, Stamenkovic said.

In 2014, the automotive industry saw a year-on-year drop of three percent, but again ranked first with the exports at EUR 1.9 billion, he said.

Maintaining the current level of car production and exports in 2015 would be important for Serbia's overall exports, he noted,

The volume of the country's foreign trade expanded by 0.8 percent in 2014, with a 1.4 percent rise in exports, Stamenkovic said, pointing to a mild increase in exports, and a mild decline in imports.

Global oil prices almost halved over the last year. If the prices stay at this level in 2015, the value of Serbia's exports would decrease by EUR 1 billion, Stamenkovic said.