EBRD cuts Serbia's 2012 GDP forecast to 1.1% from 2.1%.

By bne IntelliNews January 25, 2012
The European Bank for Reconstruction and Development said it has cut its 2012 GDP forecast for Serbia to 1.1% from an earlier 2.1% made in October. At the same time it lowered Serbia's 2011 GDP growth estimate to 1.9% from 2.1%, the EBRD said in the latest edition of its regional economic forecast overview. The EBRD reduced the 2012 economic growth forecast for Southeastern Europe to 1% from earlier projected 1.6%. It also warned that "a further deterioration of conditions in the eurozone could have a substantial further impact on the whole of the EBRD region". The report said that although Serbia's economy has stabilized, growth remains low. "Growth is estimated at around 2 per cent in 2011 but is likely to be lower in 2012," the EBRD said. It added there might be short-term economic growth, propped up by pre-election spending. Yet, major risks stay put, mainly from exposure to the eurozone, while inflation remains above levels in regional peers. Serbia ended last year with an annual inflation of 7%. "Continued IMF support provides an important buffer for Serbia too," it added. Serbia signed a EUR 1bn 18-month precautionary deal IMF in September 2011. The country will hold general and local elections in May.

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