World Bank: Serbia's growth to accelerate over medium term

World Bank: Serbia's growth to accelerate over medium term

Serbia's growth is projected to be at 2.8 pct in 2017 and 3.5 pct in 2018, said the World Bank's Europe and Central Asia Economic Update.

Private consumption is expected to grow by 0.5 pct in 2016, by 1.2 pct in 2017 and by 2.7 pct in 2018.

Government spending will grow by 2 pct after a 1.5 pct drop last year, decline by 1.1 pct in 2017 and grow again by 1.9 pct in 2018.

"The recovery of the Serbian economy continued in 2016. Growth of 2.9 pct in the first half of the year translated in the creation of new jobs – the employment rate rose to 45.9 pct, a record high level since 2008," the report said.

Structural reforms are useful for future income growth in society as a whole, although the effect of comprehensive structural reforms in the short-term can pose a challenge for lowering poverty, due to which measures for softening this effect are necessary, the report said, according to Beta.

"Welfare and job opportunities to soften the negative influence must remain an important part of the political agenda," the forecast states, which also estimates that poverty, measured by the sum of USD 5 a day relative to purchasing power parity, would go down slightly from 13.9 percent in 2016 to 13.5 percent in 2017 and to 12.8 percent in 2018.

The World Bank also said there was a risk of electricity and other fuels' prices going up which can create added pressure especially on impoverished homes, despite the expansion of privileges to buyers threatened by energy costs.