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2019/09/10 / Erste Group Research

Moderation of growth temporary; political risks loom

We see this year's growth slowdown as temporary and expect growth rates to climb towards 4% by 2021. Domestic demand is expected to remain the engine of the economy, while global tensions should diminish over time. Fiscal over performance has proved to be a trend in recent years and coupled with labor market recovery, privatization agenda and falling interest rate cost, we expect stable budget performance going forward, notwithstanding election-related risks. Monetary policy is seen as accommodative with inflation remaining in the lower part of the target band throughout the forecasted horizon.

In the near term events in the political arena will take centre stage, as parliamentary elections are six months away, on top of rising international pressure to reach a solution with Kosovo. That said, already strong FDI flows could even accelerate as a rating upgrade seems all but certain in 2020, thus further strengthening Serbia's top investment postion in the region.

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General information

AuthorErste Group Research
Product nameCEE Country Macro Outlook
Topic in focusFX, Macro/ Fixed income
Economy in focusSerbia
Currency in focusSerbian dinar
Sector in focus-


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