Serbian central bank reports fastest GDP growth in 10 years

The National Bank of Serbia (NBS) has revised the GDP growth projection from 4 to 4.2 percent, Vice Governor Zeljko Jovananovic has said.

Source: Tanjug
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NBS HQ in Belgrade (Tanjug, file)
NBS HQ in Belgrade (Tanjug, file)

This year "Serbia recorded the fastest growth in the last ten years despite adverse external conditions," Jovananovic told a presentation of the Central Bank's Inflation Report on Friday in Belgrade.

In the past three quarters GDP growth reached 4.5 percent y-o-y, he added.

Serbia’s growth projections were upgraded by all relevant international financial institutions, too – the International Monetary Fund, the European Commission, some rating agencies and many economic analysts who monitor developments in our country, Jovananovic recalled.

"Based on the results of the achieved macroeconomic stability and implemented structural reforms, we expect similar growth dynamics in the medium term, as well," the vice governor said.

The benefits of this economic progress are also felt more by our citizens. Wages and pensions are rising on sustainable grounds and unemployment is at the lowest level in the last quarter of a century.

Jovananovic also stressed that y-o-y inflation is within the target tolerance band.

"It measured 2.2 percent in October. That inflationary pressures are still low is indicated by the fact that more than half of the contribution to y-o-y inflation stems from the hike in the prices of petroleum products and fruit and vegetables," he said.

"This is also corroborated by the low and stable core inflation which moved around one percent y-o-y in the past months. According to our latest medium-term projection, which is almost unchanged from August, inflation will be moving within the target tolerance band of 3.0±1.5 percent until the end of the projection 1horizon, that is, over the next two years. Inflation movements in the medium term will be determined by the rise in aggregate demand," Jovananovic said.

"Inflation movements in the medium term will be determined by the rise in aggregate demand. Also, disinflationary pressures on account of the past appreciation of the dinar will gradually wane in the coming period. In the short term, low costs of food production will work in the opposite direction. Financial and corporate sectors also expect ainflation to be within the target band both for one and two years ahead," the vice governor of the NBS said.

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