GDP growth in 2014, 2015 to be slower

BELGRADE - The GDP growth in 2014 and 2015 will be slower than the National Bank of Serbia (NBS) expected in February this year, since the economic growth will be negatively affected by the announced fiscal consolidation and structural reforms, Branko Hinic, director general of the NBS Directorate for Economic Research and Statistics, stated on Wednesday.

The fiscal consolidation and structural reforms will, nevertheless, make room for faster GDP growth in the medium term, Hinic said presenting the report on inflation for May 2014 at the NBS.

The year-to-year inflation in April amounted to 2.1 percent and by the end of the ongoing quarter it should remain in the lower target range of 4.0 plus/minus 1.5 percent, and by the end of the year it should not go out of the target band, Hinic said.

He said that the main deflation factor will be domestic demand, along with the impact of the announced fiscal consolidation, adding that this year's agricultural session will be average and food prices will have a moderate influence on inflation as they are expected to record a slight increase.

If the tensions in Ukraine increase in the long-run, the crisis could have an indirect negative impact on Serbia through increase in world prices of wheat and energy in the first line, Hinic said.

Photo Tanjug Video, camera operator Zoran Milenkovic