Serbia
’s
economy will expand slower than previously forecast through next year because
of concern Europe’s sovereign-debt crisis will hinder investment and
trade, central bank Governor Dejan Soskic said.
The bank lowered this
year’s growth forecast to 2 percent from 2.5 percent, while gross domestic
product will grow 1.5 percent next year, compared with an earlier prediction of
3 percent, Soskic told reporters in
Belgrade
today.
The National Bank of
Serbia
is fighting the effects of the euro region’s fiscal and debt troubles by
slashing the benchmark interest rate three-quarters of a point to 10 percent on
Nov. 10 to keep the economy from slipping into recession.
Policy makers are
monitoring “trade channels and financing channels” to gauge the potential
impact of the crisis, Soskic said.
The economy expanded 0.7
percent in the third quarter, according to a flash estimate, down from 2.4
percent in the previous three-month period. The revision takes into account
slowdowns in the country’s “big trading partners, especially
Italy
,
Germany
and
Romania
,” Soskic said.
Deteriorating growth
prospects will also result in a “somewhat higher” current-account deficit of
around 7.5 percent of GDP in 2011, Soskic said.
The shortfall widened
3.5 percent in the first eight months to 1.7 billion euros ($2.36 billion),
compared with the year- earlier period.
The International Monetary Fund forecast this year’s current-account
gap will be 7.6 percent of GDP, widening to 8.8 percent in 2012 and returning
to 8.3 percent in 2013.