Despite cutting its debt, the chasm between Serbia’s economy and the rest of Europe is continuing to grow – partly because there is not nearly enough investment, experts say.
Following the successful implementation of austerity measures and a reduction of its public debt to below 60 per cent of GDP, Serbia’s government, international financial institutions and economic experts all expect it to achieve stronger economic growth in 2018.
After modest growth of only 2 per cent in 2017, both Serbia’s Ministry of Finance and the IMF forecast that its GDP would rise by 3.5 in this year.
However, in terms of development and income levels, Serbia is still far behind the EU, and also behind South Eastern Europe SEE countries; its current growth rate remains too small and too slow.
Some local and international experts say Serbia’s economy needs to grow at least 5 per cent a year to catch up – but Joze Mencinger, a Slovenian economist, stresses that such high growth rates are hard to sustain in the longer term.