The European Commission projects 3.4 pct GDP growth for Serbia in 2022 and 3.8 pct growth in 2023, according to its Spring 2022 Economic Forecast, published on Monday.

According to the report, the Serbian economy is forecast to grow faster than the EU and eurozone economies, projected to grow at rates of 2.7 pct and 2.3 pct in 2022 and 2023, respectively.

“After a strong rebound by 7.4 pct in 2021, the Serbian economy is projected to expand more moderately by 3.4 pct in 2022 and by 3.8 pct in 2023. Growth is expected to be mainly driven by private consumption and investment, but dampened by the economic fallout of Russia’s war of aggression against Ukraine”, it said.

The report said private consumption was projected to grow by 3.7 pct in 2022 and by 3.8 pct in 2023, with public consumption forecast to grow by 0.1 pct and by 0.7 pct, respectively.

Goods and services exports are forecast to rise by 8.6 pct in 2022 and by 8.5 pct in 2023, with imports in the sector to grow by 8.1 pct in 2022 and by 7.3 pct in 2023.

“Inflation is set to peak in mid-2022 and then decelerate as of autumn 2022,” the report said, forecasting Serbian inflation at 8.5 pct in 2022 and at 4.6 pct in 2023.

Unemployment is projected to decline to 10 pct in 2022 from 11 pct in 2021 and continue a downward trend next year, falling to 9.3 pct.

“Supported by a lower volume of fiscal support measures and high nominal GDP growth, the general government deficit and the debt-to-GDP ratio, after decreasing to 4.1 pct of GDP and 57.1 pct respectively in 2021, are expected to record further gradual reductions in 2022 and 2023,” the report said.

It said the general government deficit was forecast to decline to 3.1 pct of GDP this year and to 1.8 pct of GDP in 2023, while the debt-to-GDP ratio is projected to shrink to 54.5 pct and to 52.5 pct in 2023.