Serbia: medium to long term economic development (project)

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Serbia: medium to long term economic development

Client/Funding Institution

Telekom Austria Group

Abstract

The study analysed current economic developments in Serbia, the country's perspective of EU accession and provided a medium-term forecast of main economic indicators. The authors diagnosed short-term risks to economic recovery due to social and political instability as well as lacking institutional, structural, and policy reforms. In case the planned process of EU integration was realised, more reforms and rather sustainable development was expected after the elections in 2012. This was also considered to be supportive to the macroeconomic stability, which was mainly anchored in the exchange rate policy. Under these assumptions, a GDP growth rate of around 4% per year and a relatively stable currency and inflation was expected, albeit at a somewhat higher level. The alternative scenario was that the whole process stalls and the traditional muddling through strategy prevailed with rather disappointing and unpredictable results due to the changed international environment.