Macroeconomic Forecast Serbia

BMI View: Serbia's economic growth slowed to 0.5% year-on-year (y-o-y) in Q311. The Serbian Statistical Office cut its preliminary estimates by 0.2% as trade flows and manufacturing succumbed to spillover effects from the worsening eurozone crisis. As we now forecast a mild recession in the eurozone in 2012, we expect effects on Serbia's economy to aggravate and we therefore currently forecast growth to come in at 0.6%. This view is predicated also on the high level of interdependence between Serbia's banking sector and that of key peripheral states like Italy and Greece, making a credit crunch in the country highly likely.

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