Nova Ekonomija Publication: Viennese Institute Expects Change in Gov’t in Serbia Followed by GDP Growth

Vienna (Photo:PrintScreen YouTube)

The Vienna Institute for International Economic Studies expects a change in government in Serbia late this year or early in 2026, followed by gross domestic product growth, the Nova Ekonomija publication reported on March 26.

"We haven't published the latest projections yet. We are currently preparing them, but we will downgrade the forecast GDP growth for this year a little, and increase it for the next two years. That's because of the protests and political changes -- it's evident that economic activity has slowed down somewhat in the first quarter, but our expectations are also that there will be a change in government by the end of the year or early next year, and then the growth will be slightly larger," said Branimir Jovanovic, economist for Balkan countries at the Institute.

He went on to say that trade war-related global events certainly impacted economic indicators in Serbia. The National Bank of Serbia has reduced currency reserves protecting the dinar against the euro over the last two months. From Jan. 1 to the end of February, the central bank sold EUR745 million -- EUR420 million net in January and less, EUR325 million, in February.

Last year, the central bank took inverse action, purchasing EUR2.7 billion to maintain the rate of exchange. Serbia is looking at new debt in the form of eurobonds of up to two billion euros, domestic emissions of up to EUR2.1 billion and commercial loans of up to EUR3.1 billion, which will create pressure on already high public debt when it comes to its share in the GDP. Reduction in the GDP increases the share of the public debt in the GDP. The Serbian government also organized two emissions of domestic securities at the height of the ongoing protests.