wiiw Current Analyses and Forecasts
Serbia: Slow recovery with depreciation
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That, however, has its limits because the tradable sector is rather small and, given declining investments, export capacity in the short term, it also has its limits.
The government intends to sell Telecom and invest the money in infrastructure in the hope that this will lead to a rise in foreign investments in the tradable sector.
As wages are quite low in euro terms, better and cheaper access to external markets could support a speed-up in growth.
The risk, however, is that the pressure to support current consumption may lead to revenue from privatization being spent rather than invested.
In any event, slow recovery, if not stagnation, over the medium term seems the most probable outlook.
Countries covered: SEE, Serbia