Serbia might need EUR 5.5bn to cover CA gap in next three years - economists.

By bne IntelliNews December 5, 2012
Serbia might need some EUR 5.5bn in the next three years to cover its current account gap and therefore the central bank's foreign exchange reserves could be endangered, news agency Beta quoted experts from the Belgrade-based Economic Institute think tank as saying. This could happen even if Serbia attracts net foreign direct investment of EUR 5.2-5.3bn in the next three years and in line the economic activity secures further EUR 2-2.5bn via trade loans, concessions and similar, economist Stojan Stamenkovic said at the presentation of the think tank's latest Macroeconomic Analyses and Trends (MAT) bulletin on Dec 4. Thus, after the central bank reserves already shrank some EUR 2bn this year, within three years they could drop to a level enough to cover only three-month of imports in 2015, which is very risky, Stamenkovic added. This drop could be reduced via bigger foreign direct investment, therefore Serbia should urgently implement structural reforms and long-term fiscal consolidation and preserve the external liquidity and solvency.
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