Serbia will invest €10bn-€12bn into areas including energy, infrastructure, housing and tourism, under a new structural investment plan, President Alexander Vucic announced at a press conference on August 11.
Serbia’s economic growth rebounded last year after drought forced a contraction in 2017, but the International Monetary Fund (IMF) has warned that Belgrade needs to tackle structural issues to ensure growth remains robust in the medium term.
Speaking to journalists in Belgrade, Vucic named a range of areas that will receive attention under the new plan, also including energy efficiency, water and sewerage. Specifically, this will include €1bn for the reconstruction of the Belgrade-Presevo railway, €1.3bn for regional roads, €700mn for schools and health facilities, €500mn for energy efficiency and €500mn for digital infrastructure.
“We are building more roads and railways than in the time of [former Yugoslav leader Josip Broz] Tito,” Vucic told journalists, Bloomberg reported.
Projections of GDP growth for this year from international financial institutions are close to the Serbian government’s 3.5% forecast, however, growth slowed to 2.5% y/y in the first quarter of this year.
The central bank defied expectations when it lowered its benchmark interest rate to a record low of 2.5% amid falling inflation, saying it was providing additional support to credit and economic growth. The bank also pointed to global trade uncertainty that could have an impact on the Serbian economy.
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