With production picking up in the mostly export-oriented automotive industry, a more palpable growth of the Serbian economy of 3% could be expected in 2013. This, however, will largely hinge on the speed of the global economic recovery. Growth may turn out slower than anticipated in case stricter fiscal consolidation measures are applied.
Persistently high energy costs, together with a loss of confidence, could drag down demand more than expected and constrain consumption and investment. The same factors are risks to the outlook for inflation, which are on the upside in the near term. The war in Ukraine is a substantial upside risk, especially to energy prices.