Serbia's economic recovery exceeds expectations: central bank governor

Serbia's strong, timely and comprehensive response to the COVID-19 crisis enabled it to avoid larger economic slowdown and accelerate recovery, said governor of the National Bank of Serbia (NBS) Jorgovanka Tabakovic on Thursday.

Tabakovic made the remarks in a press release, commenting on the positive estimations of the International Monetary Fund (IMF) in their fourth review of the Policy Coordination Instrument (PCI) for Serbia, which was published Wednesday.

"In Serbia, the economic recovery that began in May and continued in June exceeded our May projections, while additional monetary and fiscal stimulus measures, as well as better prospects for the agricultural season, pose positive factors that the slowdown in economic activity this year could be less than projected," Tabakovic stated.

The IMF Executive Board predicted that the economic growth in Serbia will contract by 3 percent this year, and recover to 6 percent growth in 2021.

Tabakovic expressed her belief that Serbia's economic growth this year will be even better than IMF estimation, thanks to its responsible economic policy and implementation of structural reforms in past years.

She said that the NBS acted with speed to mitigate the negative effects of the pandemic by bringing measures aimed at supporting faster economic recovery and preserving employment and liquidity.

"Our goal is fully supportive in the fight for people's lives and for the creation of new jobs, and we have brought a whole package of measures that provide additional liquidity and support the purchase of apartments and encourage the construction industry," she explained.

The IMF's statement also praised the country's early containment measures against COVID-19, followed by the implementation of a large policy package of fiscal, monetary, and financial sector measures, but considering growth projection warned that "risks to the outlook are substantial given the uncertainty about the evolution of the epidemic."

"The recent rise of the infection rates in Serbia, though from low levels, underscores these risks," the IMF said.

After a 5-percent growth in the first quarter, Serbia's economy contracted by 6.5 percent in the second quarter of 2020 compared to the same period in 2019, according to the Statistical Office of the Republic of Serbia.