April 11 (SeeNews) - Serbia's economic output is expected to grow by 3.2% in 2022, the World Bank said, revising downwards its October forecast for 4.5% growth.
The World Bank expects Serbia's gross domestic product (GDP) to increase by 2.7% in 2023, it said in its Europe and Central Asia Economic Update, Spring 2022 report published on Sunday.
"The war in Ukraine and sanctions on Russia will certainly have an impact on Serbia’s exports, FDI, remittances and tourism revenues. Having in mind the significance of these flows, growth for 2022 could be revised downwards to 3.2%. Further revisions are possible depending on the length of the war and the scope of sanctions toward Russia," the lender said.
The ongoing crisis in the domestic energy sector emphasises the importance of improved management of state-owned enterprises (SOEs) in Serbia and the government should embark on a comprehensive and thorough reform to make them financially sound and viable, the World Bank noted.
"While Serbia's economy is expected to continue to grow, contributing to income growth for households, rising inflation will limit purchasing power. Particularly rising energy prices, if they are passed onto household energy tariffs, would disproportionately hit the poor."
The Western Balkans region comprising Albania, Bosnia and Herzegovina, Kosovo, North Macedonia, Montenegro, and Serbia, will record economic growth of 3.2% in 2022, the World Bank said. Growth in the region is projected at 3.1% in 2023.