In the initial months of 2024, Serbia witnessed a higher year-on-year inflation rate than the European Union’s average, surpassing all but one member – Romania. According to the latest issue of the Macroeconomic Analysis and Trends (MAT) bulletin, the real gross domestic product (GDP) in the first two months of 2024 surged by approximately 5.7 percent compared to the same period last year, exceeding the projected GDP growth rate of 3.5 percent for the entire year.
On the production front, assuming a neutral impact from agricultural production, the primary source of real GDP growth in the initial two months was the industrial sector, contributing 1.7 percentage points. Comparing February 2024 to the same month in 2023, the value of foreign trade increased by 5.3 percent, marking the first year-on-year upturn in exchange value after ten consecutive months of decline.
From January to February 2024, the total value of foreign trade amounted to 10.49 billion euros, reflecting a 0.6 percent increase compared to the corresponding period in the previous year. During this period, exports totaled 4.661 billion euros, up by 3.2 percent, while imports stood at 5.888 million euros, representing a 1.3 percent decrease. Consequently, the goods deficit narrowed by 15.4 percent to 224 million euros compared to the same period in 2023.
Approximately four-fifths of goods imports were offset by exports in the first two months of 2024 (79.3 percent), up from 75.7 percent a year earlier. The processing industry sector, which accounts for the largest share in total merchandise exports (87.7 percent), recorded a cumulative export growth of 11 percent from January to February 2024 compared to the same period in 2023, with an annual growth rate of 13.3 percent in February 2024.
In February 2024, industrial production surged by 8.4 percent compared to the same month the previous year, driven primarily by growth in the processing industry. Foreign direct investments saw an increase compared to the same period last year, alongside significant year-on-year growth in wages and retail trade turnover.
February witnessed a continued decrease in year-on-year inflation, a trend expected to persist as the National Bank of Serbia (NBS) anticipates inflation to return to the target range of three percent, plus or minus 1.5 percent, by May.
