Macroeconomic Forecast Serbia

Following weeks of intense negotiations between the coalition partners, the new Serbian government announced that it will target a budget deficit of 2.0% of GDP in 2008 and 2009. This is in line with our forecast for a deficit of 2.0% of GDP in 2008 and a shortfall of 2.1% in 2009 (compared to a 0.5% of GDP deficit for 2007). We expect the government to increase spending on welfare and infrastructure during this period.

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