Based on data of the Serbian Statistical Office, real GDP growth in Q2 measured 1.0% y/y, while seasonally-adjusted, industrial production fell by 1.7% in July, but rising by 13.0% y/y.
It is widely expected that Serbian economy will grow 0.5% to 1% in 2015, which is far better versus earlier belief that recession will be continued until 2016. Positive view is based on improved performances at industry and construction sector, while negative impact from agriculture is also considered.
Domestic consumption saw lower than expected decrease due to the fact that household available budget had stronger purchasing power on the back of lower energy prices, increasing remittances, lower inflation and higher fund of salaries at private companies.
The country’s GDP in 2016 is expected to grow 1.5% y/y, supported by net investments and export and recovery at domestic consumption.