GDP growth 3.1% in second quarter, if there had been no overhaul…

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The National Bank of Serbia has kept the GDP growth projection of 3.5 percent this year, it was stated at the presentation of the Inflation Report at the NBS. According to Deputy Managing Director of the Statistics and Macroeconomic Research Sector, Milan Trajkovic, the NBS estimated that economic growth in the second quarter was 3.1 percent, which is in line with previous projections of the NBS. “The growth was mainly driven by the service sector, which grew by four percent and the construction industry with the growth of 20 percent. We had weaker trends in industrial production due to the slowdown in economic growth in Germany and Italy, as well as the overhaul in the oil and chemical industries. Without these overhauls, GDP growth would be faster by 0.3 to 0.4 percent.” We expect growth of about four percent in the third quarter, and of more than four percent in the fourth quarter, so the projection of growth for the whole year remains 3.5 percent, Trajkovic said, referring to the activation of some significant investments in the car industry and some other lower investments, as well as the even faster growth of the construction industry in the coming period. After reaching this year’s peak of 3.1 percent in April, inflation in Serbia amounted to 1.6 percent in July. According to NBS Director of Economic Research and Statistics, Sava Jakovljevic, inflation is expected to continue to range within the target of 3±1.5%, most likely in the lower end of the target range. Vice Governor Zeljko Jovic says that due to low and stable inflation, as well as the relaxation of the US and Eurozone monetary policies, the NBS decided to reduce the interest rate in July and August by a total of 0.5 percent, which is the lowest so far in the target inflation regime.

Source: Danas, Beta

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