Consumption and retailers are slowing down, exports all weaker: consulting house on the state of the Serbian economy in 2025. – Economy

GDP growth was 3.9 percent, among higher in Europe, but in the second year, slowing down to 3.3 percent, with further slowdown in 2025. The Republic Statistical Office announced an evaluation of year-on-year growth in the first quarter of this year of two percent.

Household consumption remains the main driver of economic growth. In 2024. year consumption increased by 4.2 percent, after growth of only 0.5 percent in 2023.

« This acceleration, as it seems, is greatly due to the growth of earnings and pensions, in the conditions of high employment. But in the same
Time, enhanced consumption works to lead to an increase in imports, primarily consumer goods, which has become very visible during 2024. years, « said in analysis.

Investments are another important driver of economic growth, but also that weak. The annual investment growth rate fell on only one percent in the fourth quarter of 2024. years, after high feet of eight, nine percent in 2023. and more part 2024. years. Experts EY assess that public investment is coming « from the end of 2024. In the conditions of mass protests, in the field of coastal station in November 2024. Years ».

It also slows down the amount of housing growth after a long-year strong cycle.

Net exports has an increasingly negative effect on economic growth, because exports are stagnant due to poor exterior demand, primarily in EU markets and a declining competitiveness, although somewhat increase in exports in China amortizes these tendencies.

Geopolitical conditions are unfavorable for economics with military conflicts in Ukraine and in the Middle East continued in 2025, while trade conflicts were intensified, with the imposition of very high customs new US administration on imports in the United States.
As a consequence of the end of 2024. Year, inflationary pressures occur.

This event development reduces space for leading central banks, such as ECB or Fed, to bring interest rates and so
encourage economic growth, and what indicates that the giving cycle, began in the middle of last year in most leading
Central banks, for now paused.

The economic growth of key trading partners in Serbia in the EU remains modest. The growth of leading European economies, such as Germany
Italy, stagned in 2024 years, and the prospects for 2025. They remain weak (about one percent in 2025. for the eurozone and zero for Germany).

According to the production principle, retail gives the biggest contribution to gross value added (BDV) and removes a third of growth. Retail growth is happening thanks to increasing salaries and pensions, and favorable developments in the labor market.

However, retail slows down at the end of 2024. And early 2025. years. Slowing down in recent months is most likely
a consequence of increasingly stronger statistical effect, given the almost two-digit growth rate achieved in retail at the end of 2023. and
at the beginning of 2024. years.

Solid contribution are growing and mining and ICT sector.

Energy, agriculture and part of the processing industry records poor growth rates, primarily due to the drop in demand for cars and carodules and machines. The counterwater is the growth of Chinese demand for copper and other colored metals.

Until the second half of last year, the construction recorded high growth rates, but then it follows a serious slowdown. In the third quarter last year, growth slowed to 1.2 percent, to turn that into a decline in 5.5 percent in 2024.

As for housing, the total area of ​​residential buildings for which the requirements for the issuance of building permits decreased by 4.4 percent in 2024. years and for six percent in January 2025. years.

« Construction of traffic infrastructure and other public capital investments significantly contributed to the overall economic, and were
are also the main growth factor of the construction sector in 2024. However, the growth trend in this part of construction seems to be significantly
slows down, as the value of the license decreased in the last few months – potentially related to current political
uncertainty. For example, the value of licenses in the field of traffic infrastructure objects for the period from November 2024. To
January 2025. It fell by as much as 25 percent, « is noted in the analysis.

Regarding the industry, it can be said that the production of the sector that affects the Chinese demand for basic metals and metal ores increases, while the sectors exporting machines and parts in the EU are bought. In addition, the food industry records negative trends due to bad weather conditions in 2024. and early 20205. Years, and this is the cause of poor energy result.

EY experts expect economic activity in Serbia at 2025. at 3.2 percent, after 3.9 percent in 2024. And previously forecasts that GDP will increase by 3.8 percent this year.

The main factors that contribute to weaker expectations is weaker EU growth from expected as much as Serbian exports, as well as investment inflows.

Another factor is more than expected inflation rates on the global level, but also locally, which will prevent Centrlane banks to significantly lower interest rates.

The third factor are mass protests throughout Serbia that can negatively affect public capital investments and household consumption.

In the end, the nature in the first part of the year was not inclined, so the first quarter was warm and SUV, without precipitation, that in April they had a strong city and frost, which would affect agricultural production, energy and exports.