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Serbian economy achieved pre-crisis level in Q1

Christian Fernsby |
The National Bank of Serbia (NBS) Executive Board decided on Thursday to keep the key policy rate at 1.0 pct and said the Serbian economy had reached the pre-COVID-19 levels of activity already in Q1 2021.

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Topics: SERBIA   

“As assessed by the Board, the effects of past monetary and fiscal measures can be expected going forward, helping maintain the favourable financing conditions of businesses and households, and propping up their disposable income. A boost will also come from the adopted third stimulus package worth around 4.3 pct of GDP this year,” the NBS said in a statement.

“The Board stressed that our economy outperformed expectations early this year as well. It reached the pre-crisis level earlier than many world economies – already in Q1 this year versus Q2 as initially forecast.

According to the Serbian Statistical Office, Q1 saw GDP growth of 1.2 pct y-o-y. The major impetus, as assessed by the NBS, came from net exports. As in the years before, exports remained diversified geographically and product-wise, reflecting a robust FDI inflow mainly to tradable sectors,” the central bank said.

“As investment and consumer confidence has been preserved and infrastructure projects are unfolding, fixed investment and consumption are also on the path of recovery. An additional impulse is expected from the third fiscal stimulus for businesses and households and higher planned government capital expenditure.

We expect that the continued successful vaccination and the recovery of services still affected by the pandemic will help achieve GDP growth of 6 pct, which is above our initial projections owing to the GDP growth recorded in Q1,” it said.

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