Serbia’s economy is showing robust growth, with an increase from 3.8% to 4.2% this year compared to last, according to Richard Rekord, the World Bank’s lead economist for the Western Balkans. He highlighted the growing confidence in Serbia’s integration into global supply chains, noting significant new investments and an improved credit rating for the country.
Rekord emphasized the importance of continued job creation and productivity improvements to sustain this growth and enhance living standards in the medium term. Regarding public debt, he stated that as long as it is managed prudently, it is justifiable. He pointed out Serbia’s substantial infrastructure needs, especially in transportation and energy, particularly considering the decarbonization of the economy.
He also discussed the challenges of prioritizing projects to ensure they are executed efficiently and at a pace that allows the government to borrow responsibly without overextending itself. Rekord responded to concerns about Serbia’s reliance on commercial bank loans for deficit coverage, calling the country’s debt financing strategy prudent. He noted that Serbia maintains a primary surplus and borrows from the World Bank under favorable terms, with external borrowing achieved at reasonable rates due to growing confidence and an upgraded investment rating.
When asked about the future orientation of Serbia’s economy, Rekord asserted that it lies firmly in Europe, with the EU and neighboring European economies representing over 70% of Serbia’s trade. He highlighted the potential for integration into global supply chains anchored in Europe, offering opportunities for technology access, business processes, and advancements in sectors like electric vehicles.
Rekord also addressed the impact of drought on food prices in Serbia, linking it to global climate risks that have particularly affected the Western Balkans. He acknowledged the challenges posed by climate instability on crop yields, leading to significant food price increases in the region.
To keep food prices low and affordable, he recommended fostering competition, encouraging new investments, and adopting new technologies in both food production and distribution.
