Serbia’s economy may contract as much as 2.5 percent this year on falling industrial and agriculture output, the Economics Institute said in its first report since the new government took office.
Industrial production has been lower on a year-on-year basis every month since the start of 2012, and will probably decline 4 percent over the first 10 months, the Belgrade-based institute said today in a monthly survey of the economy. A bad harvest because of a drought will also affect full-year gross domestic product, it said. The central bank forecasts a 0.5 percent decline.
“We more or less agree with the central bank on inflation, that it will reach 9 percent to 10 percent by the end of the year,” Vladimir Vuckovic, the leader of the research team and a member of the country’s Fiscal Council, said as he presented the report. Over the first nine months, consumer prices are seen growing 7.9 percent, he said.
“The level of industrial production in June is one of the lowest since the crisis began in 2008,” Vuckovic said. “Demand, both domestic and abroad, is clearly weakening.”
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