Serbia: Economic growth moderates in the second quarter
GDP reading: According to a preliminary estimate, GDP growth waned to 4.2% year on year in the second quarter from 4.7% in the first quarter. The reading came in slightly above market expectations.
Drivers: The statistical office did not release a detailed breakdown, but monthly data indicates that cooling industrial activity was one culprit behind the deceleration. Another may have been the external sector: The merchandise trade deficit widened in Q2 from Q1. More positively, private spending should have remained healthy, as signaled by a faster increase in retail sales amid lower inflation.
A comprehensive breakdown is scheduled to be published on 2 September.
Panelist insight: Alen Kovac, analyst at Erste Bank, said:
“Consumption is expected to be the main driver of GDP growth in 2024. Return of inflation inside the target range and 15% y/y nominal net wage surge in 5M24 are boosting real disposable income, while credit conditions are set to improve throughout the year as the NBS started its easing cycle.”