Labus: Serbia’s growth rate will return to pre.crisis levels next year
The editor-in-chief of the “White Book 2021” of the Council of Foreign Investors, Miroljub Labus, stated today that Serbia’s economic results this year are better than expected, and that the country will achieve higher economic growth than many countries in the world, but that next year rates return to those before the crisis.

“This year was a good year, better than we expected. Serbia achieved good growth for two reasons: the huge financial support that the state provided to the economy and citizens, as well as excellent yields in the agricultural sector,” Labus said at the presentation of the White Paper. 2021 “.

He added that the rate of economic growth in Serbia will be higher than in many other countries, but that next year economic growth will return to average values.

He also stated that in 2019, the rate of economic growth in Serbia was based on investments and the construction sector, while this year the drivers are consumption and trade.

Labus believes that Serbia needs new investments, based on production, but also reindustrialization.

“We have to produce, that’s why we need bigger investments,” he said, adding that it is necessary for companies to reinvest more earned money in production.

He added that the growth of public investment must be limited, so as not to jeopardize fiscal stability.

He cited inflation, then public debt, which must not exceed the limit of 60 percent of GDP, as risks that the state could face next year.

He believes that the Government of Serbia must find a way to deal with inflation, so the recommendations of the Council of Foreign Investors are to maintain fiscal stability, ie to set an upper limit on the share of public debt in GDP, because interest rates are expected to increase .

Labus added that the recommendation is to better control the fiscal deficit, as well as to control public spending on infrastructure so as not to jeopardize fiscal stability.

According to him, the companies members of the Council of Foreign Investors, 80 percent of which come from the EU, want to have the same conditions as in any other market in the Union.

“We are concerned about the free movement of goods, services, people and capital. It is evident that progress has been made in these sectors, but our companies believe that the business environment can be even better,” Labus concluded.

The President of the Council of Foreign Investors and the General Manager of Telenor, Mike Michel, assessed that Serbia has shown determination to improve the business environment despite the challenges of the pandemic.

“Although the pandemic is a new reality, it still determines the direction in which the rest of this and next years will move. The Serbian economy has recovered from the shock and is returning to relatively stable growth, but permanent negative consequences remain, and investments will be affected primarily getting out of the recession, ”he said.

At the same time, he added, the overall recovery will depend on how effectively economic policy measures, applied in conditions of high uncertainty, can mitigate the damage.

Michelle believes that the positive signal is the accelerated digitalization that can help initiate constructive changes.

The head of the delegation of the European Union (EU) in Serbia, Emanuele Ziofre, stated that 68% of the companies in this Council come from the EU and reiterated that the EU is committed to the European perspective of Serbia.

“We are determined to support its European path, the EU will not be complete without the Western Balkans, and it is a priority for the EU,” he said.

He emphasized that Serbia is getting closer to the EU and that more than 60 percent of the country’s trade activity is related to the EU, where most foreign direct investments come from, about 68 percent.

He pointed out that it is necessary to further reform the public administration and mentioned the rule of law, corruption and insufficient efficiency of the system as problematic.

Ziofre cited faster issuance of construction permits as positive, but resented the fact that the Law on Foreign Exchange Transactions is restrictive, as well as the fact that many bylaws are adopted without insufficient consultations with the economy.

He expects an even more favorable climate for investments in Serbia, as well as that the EU wants more innovative products and the implementation of the green agenda, as a new model of growth in the future.

By Editor

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