塞爾維亞宏觀經(jīng)濟(jì)發(fā)展報(bào)告-英

MacroeconomicDevelopments

inSerbia

November2023

SustainedMacroeconomicStability

.Despitethemultidimensionalcrisisthatlastsmorethan3years,Serbiahasmanagedtopreservethestabilityofitseconomyandtheconsumersandinvestorsconfidence,asevidencedbycumulativerealGDPgrowthintheperiod2020-2022ofaround9.5%,recordinflowsofFDI,continuedgrowthofemploymentandwagesintheprivatesector,aswellasarecordlevelofFXreserves.

.InflationhaspeakedinQ12023,sinceAprilithasbeenonadecliningpath,andinOctoberreturnedtoasingle-digitlevel(8.5%y/y).Inflationwillcontinuefallingthroughtheprojectionhorizon,whilethereturntothetargettolerancebandisexpectedinmiddle2024.

.OurnewGDPgrowthprojectionin2023is2.5%.ProjectedGDPgrowthfor2024rangesfrom3%to4%,andinthemediumtermweexpectareturntopre-crisisgrowthratesof4%.

.RealGDPgrowthinQ32023stoodat3.5%y/y(0.8%s.a.),whileinQ4weexpectaccelerationofGDPgrowthtoaround3.8%y/y.

.TheNovemberCADprojectionfor2023hasremainedatalevellikethatoftheAugustprojection,amountingtoEUR1.7billion(2.5%ofGDP),whiletheCADprojectionfor2024hasbeenrevisedupwardfromEUR2.5bn(3.3%ofGDP)toEUR2.9bn(3.8%ofGDP),duetoexpectedaccelerationofinvestmentcycle.

.Owingtoproductandgeographicdiversificationandexport-orientedinvestments,goodsandservicesexportsin2022increasedbymorethan30%,whilethey/ygrowthinninemonths2023stoodat10%.

.AccordingtoLFS,theunemploymentratein2022stoodatthelowestlevel9.5%andinQ22023was9.6%,whichis0.5pplowerthaninQ1.Formalemploymentcontinuedtogrowinninemonths2023by2.6%y/y.

.FiscaldevelopmentsinQ1-Q3werealsobetterthanexpected,witharealizedsurplusoftheconsolidatedbudgetofRSD16bn(0.3%ofGDP).InSeptember2023centralgovernmentpublicdebtstoodatthelevelof51.3%ofGDP.

.InNovember,thekeypolicyratewaskeptunchangedat6.5%supportedbythecontinuedeasingofglobalinflationarypressuresandtheestablisheddownwardpathofdomesticinflationanditsexpectedreturnwithinthetargettolerancebandoverthemonetarypolicyhorizon.TheBoardalsotookintoaccountthefactthatmonetaryconditionsweretightenedinthepreviousperiodthroughthemaininstrument–theinterestrate,andinSeptemberalsobyincreasingthereserverequirementratio,withthefulleffectsofthesemeasuresyettobeplayedout.

2

.Bankingsectorstabilityhasbeenpreserved-theshareofNPLsinSeptemberwasat3.17%.

3

?Intheperiodofsevenyearspriortotheoutbreakofthecurrentcrisis,inflationaveragedaround2%.

?Averageannualinflationin2022was11.9%andwasledbysupply-sidefactors:theglobalenergycrisis,lingeringconsequencesofthepandemic,andthedroughtthathitourregion.

?InOctober2023inflationsloweddownandstoodat8.5%y/ywhichislargelyattributabletothesoftergrowthinfoodpricesand,toalesserextent,coreinflation.

InflationinOctoberbacktoaSingle-DigitLevel(8.5%y/y)

InaccordancewithNBSexpectations,theinflationfollowedadecliningpathsinceQ2...

…withlowerlevelofcoreinflationcomparedtotheheadline

Chart1CPIdevelopments

(y/yrates,%)andcontributions(pp)18

16

14

12

10

Chart2Contributionstoy/ycoreinflation

(pp)

12

11

10

9

8

7

6

5

Остало

Енерги?а

Базнаинфлаци?а*

Храна

ИПЦинфлаци?а

Дозво?еноодступа?еИнфлационици?

Fixedtelephone,internet,cabletvOther

RestaurantsandHotels

Homeappliances

PharmaceuticalgoodsandMedicines

ClothesandFootwear

7.3

RentsandhousingcostsTravelpackages

8,5

AutomobilesandtransportCoreInflation

8

4

3

2

6

4

1

2

0

0

-1

1471014710147101471014710147101471014710147101471014710147101471014710

-2

20102011201220132014201520162017201820192020202120222023

1471014710147101471014710147101471014710147101471014710147101471014710

2010.2011.2012.2013.2014.2015.2016.2017.2018.2019.2020.2021.2022.2023.

?Intheperiodbeforetheoutbreakofthecurrentcrisis,coreinflationalsoaveragedaround2%.

?InOctober,coreinflationsloweddownto7.3%y/y,whichwascontributedbytheweakeningofcostpressuresandeffectsofthetighteningofmonetarypolicy.

?Theretreatinginflationreflectedonafurtherfallinone-yearaheadinflationexpectationsofthefinancialsector(IpsosOctobersurvey5.9%,BloombergNovembersurvey5.0%),aswellasontwo-andthree-yearaheadexpectationswhicharewithintheNBS’stargettolerance

band.

4

InflationWillFollowDownwardPathintheComingPeriodasWell

…weexpectittodroptoaround8%y/yattheendofthisyear…

Chart3Inflationprojection(November2023IR)

(y/yrates,in%)

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

0

-1

912369123691236912369

2022202320242025

?Inflationslowdownistheresultoftheeffectsofpastmonetarytightening,theslowerpaceofimportedinflation,thedecreaseininflationexpectations,aswellastheeasingofcost-pushpressures.

?Cost-pushpressuresareweakeningduetothefallinpricesofprimaryagriculturalcommoditiesandcertainindustrialrawmaterials,aswellasbetterfunctioningofglobalsupplychains.

?Disinflationaryeffectalsocomesfromsubduedaggregatedemandduetoslackenedglobalgrowth.

…andreturnwithinboundsofthetargettolerancebandinmid-2024.

Chart4Inflationprojection(November2023IR)

(averagey/yratesin%perquarterandcontributionsinpp)

18

16

14

12

10

8

6

4

2

0

-2

Oilderivatives

Non-foodFood

pricespricesQ1*

Q3

Q1

Q3

Q3

Q1*

Q3

Regulated

Consumer

Q1Q3

2021202220232024*2025*

*NBSForecast

?Thekeyriskstotheprojectionaremostlyrelatedtoexternalenvironmentandrefertogeopoliticalconditionsandtheoutlookforglobaleconomicgrowth,andtheirimpactonglobalenergyandcommodityprices.

?Asforthefactorsfromthedomesticenvironment,theprojectionrisksaremainlyassociatedwiththepaceoftherecoveryofdomesticdemandandtheoutcomeofnextyear’sagriculturalseason.

?Overall,therisksoftheinflationprojectionareassessedassymmetric.

AccelerationofGDPGrowthinH22023

Growthinthe2023ledbynetexportsandfixedinvestments

Chart5GDPdevelopments

(y/ygrowthratesin%andcontributionsinpp)

14

12

10

8

6

4

2

0

-2

-4

NXGCCGDP

7.7

4.54.3

4.0

3.3

2.52.5

1.8

-0.9

-1.6

3.5

2.1

2014201520162017201820192020202120222023*2024*2025*

*NBSforecast

.ThankstothepreservedmacroeconomicandfinancialstabilityandthetimelyandcomprehensivepackageofeconomicmeasuresadoptedbytheNationalBankofSerbiaandtheRSGovernment,SerbiarecordedacumulativegrowthofrealGDPof9.5%inthreeyearsofcrisis(2020-2022).

.AccordingtotheSORSflashestimate,GDPrecordedrealgrowthof3.5%y/yinQ32023(0.8%s.a.),drivenbynetexports,fixedinvestmentsandgovernmentconsumption,accordingtoourestimate.

.InQ4,weexpectGDPgrowthtoacceleratetoaround3.8%y/y,whichwillbedrivenbythegrowthofservicesectors,agricultureandconstruction,whileslightlysmallergrowthshouldberecordedinindustry.

InthecomingyearsSerbiawillmaintainastrong,sustainableandbroad-basedgrowth

Chart6GDPgrowthprojection(fromNovemberIR)

10

(y/ygrowthratesin%)

8

6

4

2

0

-2

Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3

2022202320242025

.OurnewGDPgrowthprojectionfor2023is2.5%andishigherthantheprojectionfromtheAugustIRwhenweprojectedgrowthclosertothelowerendofthe2%to3%range.

.Fromtheproductionside,accordingtoourestimates,growthwillprimarilybedrivenbythegrowthofservicesectors,agricultureandconstruction,whileweexpectaslightlylowercontributiontogrowthfromtheindustry.

.Wehavekeptthegrowthprojectionfor2024intherangeof3.0%to4.0%,andinthemediumtermweexpectareturntothepre-pandemicgrowthtrajectoryof4%peryear.

5

InvestmentsRemainataHighLevel

Precededbyachievedmacroeconomicstability,investmentcyclebeganin2015…

Chart7FixedinvestmentshareinGDP

(nominalterms,in%ofGDP)

25

20

15

10

5

0

22523.324.223.223.523.724.0

20.0

.21.4

177

17.017.1

15.9

.

202120222023*2024*2025*2026*

2014201520162017201820192020

privateinvestment

*NBSestimate

Governmentinvestment

Grossfixedinvestment

.In2015-2019,fixedinvestmentscumulativerealgrowthwasabout64%.TheshareoffixedinvestmentinGDPincreasedto22.5%in2019.Despitepandemic,fixedinvestmentscumulativlyincreasedinrealtermsduring2020and2021foraround14%.

.Accordingtoourestimate,theshareoffixedinvestmentsinnominalGDPin2022hasreachedthelevelofaround24%.

Governmentinvestmentsreachedlevelofover7%ofGDPin2021andshouldremainaroundthatlevelinthemediumterm.

.Startingfromtheanalysisoftheplannedcapitalprojectsintheinfrastructureinthenexttenyears,weexpectshareofinvestmentinGDPtostayhigh.

…supportedbydiversifiedfinancingsources

Chart8Keysourcesofinvestmentfinancing

(inEURmln)

14.00012.00010.0008.0006.0004.0002.000 0-2.000-4.000

201420152016201720182019202020212022

Domesticcompaniesprofitability(estimate)FDI

GovernmentCAPEXDomesticinvestmentloans(growth)

.Inearlieryears,investmentshavelargelyreliedonFDI.

.Owingtomaintainedmacroeconomicandfinancialstability,relativestabilityofexchangerate,aswellasfiscalconsolidation,inrecentyearsthreemorestrongpillarsforfinancinginvestmentshavebeenestablished:multipliedprofitabilityoftheeconomy,investmentloansanddoubledgovernmentinvestments.

.Ontopofthat,FDIinflowreachedrecordlevelsofaround7%ofGDPin2021-2022.

6

7

Totalinflow:

3.5

3.0

2.5

2.12.1

1.5

MacroeconomicandFinancialStabilitySupportedHighFDIInflow

Macroeconomicandfinancial

combinedwithstructuralreformshasafavourableclimateforFDIs…

stabilitycreated

5.00

4.00

3.00

2.00

1.00

0.00

-1.00

Chart9FDIcompositionbysector

(EURbn)

4.4

3.8

3.5

3.0

Totalinflow:

2.1

1.5

0.9

0.6

2.5

2.0

2.0

3.9

2.2

0.9

0.8

2.4

2.1

1.6

201420152016201720182019202020212022

OtherConstruction&realestate

FinanceTrade

ManufacturingTradablesector*

*industry,agriculture,transport&storage,accomodationandfoodsvc.

?OutofaninflowofEUR18.6bninpastfiveyears(2018-2022),overEUR10.0bnhasbeendirectedintotradablesectors,mostnotablymanufacturing(almostEUR6.0bn).

?ManufacturingsectorswiththehighestFDIinflows(metals,autos,food,rubberandplastic)recordedahighgrowthinemployment,outputandexports.

?SerbiahasattractedmorethanhalfoftotalFDItotheWesternBalkansregioninthe2018-2022.

…whicharediversifiedbysectorandoriginandcontributingtotheemploymentgrowthandcountry’sexportpotential

Chart10FDIcompositionbygeographicorigin

5.004.504.003.503.002.502.001.501.000.50

0.00

4.4

(EURbn)

3.8

3.9

201420152016201720182019202020212022

EAEU27ex-EAEuropeex-EU27China/HK

MiddleEastUSARestofworld

?In2022,FDIinflowamountedtoEUR4.4bn(netinflowEUR4.3bn).

?Inninemonthsof2023,FDIinflowamountedtoEUR3.2bn(netinflowEUR3.0bn),whichstillrepresentsahigheramountcomparedtothesameperiodlastyear.

?FDIinflowsarediversifiedbyregionoforiginaswell,withagreatershareofcountriesfromtheAsiaPacific,alongsideSerbia’smajortradingpartner-theEuropeanUnion.

0

-5

-10

0%

-5%

InQ1-Q32023,theReductionoftheCADWasGreaterThanExpected

CADprojectionfor2023unchangedat2.5%ofGDPduetostrongexportgrowthandlowerenergyimport

Chart11Currentaccountbalancebycomponent

(EURbn)

15

10

5

-3.5%-2.9%-5.2%-4.8%-6.9%-4.1%-4.2%-6.9%-2.5%-3.8%-4.1%-4.2%

-15

201520162017201820192020202120222023*2024*2025*2026*

GoodsSecondaryincomePrimaryincomeServicesCAD

?In2015-2022Serbia’scurrentaccountdeficithasbeenfullyfinancedbyFDI,whichismostlyexpectedinthefollowingyearsaswell(projectednetFDIinflowofaround5%ofGDP).

?In2022thecurrentdeficitofEUR4.2bn(6.9%ofGDP)wasrecorded.

?Inninemonthsof2023,deficitamountedtoEUR792mln(1.6%ofGDP),whichisareductionofEUR2.5bnony/ylevel,asaresultoflowerpricesofenergy,aswellasthegrowthofexportsofservices,manufacturingandelectricity.

?CADprojectionfor2024hasbeenrevisedupwardsto3.8%GDP,primarilydrivenbyanewinvestmentcycleandtherecoveryofequipmentandintermediatesimport.

Speed-upofinvestmentcyclewillbefollowedbystabilizationinshareofgrossnationalsavings

Chart12Savingsandinvestmentbalance

(%ofGDP)

30%

25%

20%

15%

10%

5%

-2.9%-5.2%-4.8%-4.1%-4.2%-2.5%-3.8%-4.1%-4.2%

-6.9%

-6.9%

-10%

2016201720182019202020212022*2023*2024*2025*2026*

GrossnationalsavingsGrossdomesticinvestmentSavings-investmentbalance

?TheS-Igapnarrowedin2023asaresultofincreaseofgrossnationalsavingsandslowergrowthinprivateinvestments.

?Overtheintermediateperiod,expectedstabilizationofthegrossnationalsavingssharewillbeaccompaniedbyagradualspeed-upofinvestmentsintransport,energyandcommunalinfrastructure,aswellasinprojectsrelatedtotheinternationalworldexhibitionEXPO2027.

8

RevealedExportsResilienceDuringtheCrisis;LowerImportsLedbyaBetterSituationintheEnergyMarket

Newinvestmentsandcontinuedexpansionoftheexportcapacitieswillensurehighgrowthofexportsinthemediumterm

Chart13Exportsofgoodsandservices

(EURbn)

60

50

40

30

20

10

0

2014201520162017201820192020202120222023*2024*2025*2026*

OtherManufacturingAgricultureSevicesexports

*NBSForecast

?In2022,therewasanintensivegrowthofgoodsexportsof28.0%,drivenbythestronggrowthofexportsofthemanufacturingandminingsectors.

?Theservicesexportsgrowthin2022amountedto42.1%andwasdrivenbyexportsoftourismandICTservices.AtotalofmorethanEUR11bnwasrecordedintheexportofservices.

?DuringtheperiodQ1-Q32023,anincreaseingoodsexportsby5.8%y/ywasrecorded,drivenbyhighermanufacturingandelectricityexports,whiletheexportsofservicesgrowthof20.7%y/ywasdrivenbyICT,transportationandbusinessservices.

Theprojectionreflectsthatthenewinvestmentcyclewillreflectontheincreasedimportsofequipmentandintermediategood

Chart14Importsofgoodsandservices

(EURbn)

60

50

40

30

20

10

0

2014201520162017201820192020202120222023*2024*2025*2026*CapitalgoodsInterm.GoodsConsumergoodsUnallocatedgoodsServicesimports

*NBSForecastt

?Goodsimportsincreasedby34.1%in2022,drivenbyintermediateproducts(around60%oftotalimports),ofwhichathirdaccountsforhigherenergyimports.

?Importsofservicesincreasedby37.0%y/yin2022,drivenbytransportandtourismservices.

?Importsofgoodsdecreasedby6.0%y/yduringtheninemonthsof2023,withthelargestcontributiontothedecreasecomingfromreducedintermediatesimports,whichincludesenergy,whiletheimportsofservicesincreasedby15.2%y/yforthesameperiod.

9

10

GeographicDiversificationHelpedForeignTradeResilienceDuringPandemicandUkraineCrisis

Asignificanty/yincreaseinexportsto

Germany,wasrecordedinH12023…

…whichwasfollowedbythegrowthofimportsfromGermany

Chart15GoodsexportsbycountryinH12023/H12022

(EURmnand%oftotal)

2500

2000

1500

1000

500

0

14.8%oftotalexportsinH12023

H12022

66.1%

16.0%

4.3%

H12023

65.5%

15.0%

5.4%

5.5%

3.7%3.5%3.4%3.3%

EU:CEFTA:

CIS:

4.2%4.2%3.8%

6.4%

6.7%

5.2%

DEUBIHITAHUNROURUSMNECROCZECHNBGRMKD

Chart16GoodsimportsbycountryinH12023/H12022

(EURmnand%oftotal)

3000

2500

2000

1500

1000

500

0

12.8%oftotalimportsinH12023

11.8%

EU:

CEFTA:

CIS:

3.2%3.1%

H12022

55.9%

5.1%

8.1%

H12023

57.6%

4.6%

7.1%

7.1%

5.8%

4.7%

4.3%

2.9%2.8%2.7%2.6%

DEUCHNITARUSTURHUNPLROMAUTBHFRASLO

?Serbia'sexportsshowedresistanceinH12023,despitethedecreaseindemandfromtheEUandtheregion,onwhichitreliesthemost.Inthisperiod,mostofSerbianexportswenttotheEU,followedbyCEFTAandCIS.

?Bycountry,thelargestshareofexportswenttoGermany(14.8%),followedbyBosniaandHerzegovina(6.7%),Italy(6.4%),Hungary(5.5%)Romania(5.2%)andRussia(4.2%).

?MajorityofimportsinH12023comefromtheEU(around58%),followedbyCISandCEFTA.

?Comparedtothesameperiodofthepreviousyear,thevolumeofimportsfromGermanyinH12023overtookthevolumeofimportsfromChina,makingGermanythelargestimportingcountryagain(withashareof12.8%).

FavourableDevelopmentsintheLabourMarketandProductivityGrowth

Single-digitunemploymentrateinQ22023Significantcontributionoftotalfactor

(9.6%)

Chart17LabourmarketindicatorsaccordingtotheLFS*,(in%)

60,0

50,0

40,0

30,0

20,0

10,0

0,0

54.754.755.255.8

50.3

51.852.452.952.952.2

48.649.549.650.4

43.4

44.845.647.047.1

40.8

18.9

16.4

14.5

13.7

11.0

10.19.6

9.7

9.5

11.2

20152016201720182019202020212022**Q1Q2

2023

Employmentrate

UnemploymentrateActivityrate

Source:StatisticalOfficeRepublicofSerbia.

*LFSdatarevisedaccordingtothenewmethodologyfrom2021.

**From2022dataalignedwiththeCensus2022.

?AccordingtodatafromtheLabourForceSurvey(alignedwiththe2022census),theunemploymentratereturnedtoasingle-digitlevelinQ2andamountedto9.6%(-0.5p.p.comparedtoQ1),whiletheemploymentrateamountedto50.4%,whichisanincreaseof0.8p.p.comparedtoQ1.InQ2,therateofinformalemploymentwas12.3%(andwasunchangedcomparedtoQ1).

?Theactivityrate(persons15+)inQ22023amountedto55.8%,thusreachingarecordlevel,andby0.6p.p.ishighercomparedtoQ1.

?Therevisedaverageunemploymentratefor2022is9.5%,itslowestleveltodate.

productivityandcapitaltoGDPgrowth

Chart18ContributionoffactorsofproductiontoGDP*

(inpp,periodaverage)

8.07.06.05.04.03.02.01.00.0-1.0-2.0

-3.0

7.7

4.4

3.8

2.5

2.4

-0.9

2015-20172018-20192020

TFPCapital

20212022-20232024-2025

LabourGDP

Sources:SORS,NBScalculation.

*NBSestimate.

?Accelerationofeconomicgrowthintheperiod2018-2019wasdrivenmainlybyfasterproductivitygrowth.

?In2020,similartoothercountries,therewasatemporarydropinproductivityandanegativelabourcontributionduetoreductionintheparticipationrateduetothepandemic.

?From2021productivitywasthemaindriverofgrowth,alongwithinvestment.

?Inthemediumterm,wealsoexpectfromproductivityandinvestmenttobethemaindriversofGDPgrowth,whilethecontributionoflabourwillbelower.

11

2.01.9

1.6

1.0

GrowthinWagesandEmploymentDuring2023

RealwagegrowthintheprivatesectorintheperiodJanuary-August2023(1.8%y/y)

Chart19Nominalnetwagesbyeconomicsector(y/ygrowth,in%)

26,0

22,0

18,0

14,0

10,0

6,0

2,0

-2,0

Trade

Transportationandstorage

InformationandcommunicationsTourismandcattering

Education

Manufacturing

Construction

AdministrativeactivitiesAgriculture

HealthCare

Sources:SORS.January-August2023

?IntheperiodJanuary-August2023,thenominalaveragenetwagewas84,389dinars(720euros)andishigherby15.2%.Thegrowthwasdrivenbyafastergrowthofwagesintheprivatesector(16.6%y/y)thaninthepublicsector(12.2%y/y).

?During2023,adouble-digity/ygrowthofaveragewageswasachievedinalmostallactivities,anditismostpronouncedintradeandmanufacturing.

?Duringeightmonthsof2023,nominalnetwagesgrewslightlyfasterthaninflation,sobasedonfactorsfromthelabourmarket,nosignificantinflationarypressureswereinduced.

Highlevelofformalemploymentintheprivatesectorduringninemonthsof2023

Chart20Contributiontoy-o-ygrowthintotalformal

employmentbyeconomicsector(periodaverage,inpp)

4,0

3,0

2,0

3.3

2.6

2.62.6

1,0

0,0

-1,0

-2,0

2016201720182019202020212022Jan.-Sep.

Sources:SORSandNBScalculation.

Professionalact.;Admin.act.Industry&watersupply

Trade,F&A,Transport,ICT

Totalformalemployment(in%)

2023

Agriculture&farm.

Construction

Otheractivities

?TotalformalemploymentintheperiodQ1-Q32023amountedto2.36millionpersonsandishigherby2.6%y/y(59thousandpersons).Thisgrowthwasledbyprivatesectorgrowthof3.3%y/y(about56thousandpersons),withahighlevelofemploymentintheprivatesectorofabout1.75millionpersons.

?Employmentgrowthispresentinmostactivities.GrowthstandsoutinICT(employmentatarecordlevelofabout109thousandpersons)andinprofessionalandscientificactivities(thenumberofemployeesexceededthelevelof140thousandpersons),aswellasinmanufacturing(employmentofmorethan500thousandpersons).12

6.0

4.0

2.0

.0

-2.0

-4.0

-6.0

-8.0

-10.0

FiscalDevelopmentsinQ1-Q3WereBetterThanExpected

Inninemonthsof2023,theconsolidatedsurpluswasRSD15.8bn(0.3%ofGDP)

Chart21Centralgovernmentrevenues,expendituresand

60.0

50.0

40.0

30.0

20.0

10.0

.0

outcome(%shareinGDP)

1.1

0.6

0.3

-0.2

-1.2

-3.2

-3.5

-4.1

-5.1

-6.4-6.2

overabaance:

Primarybaancerhs

Fiscabaancerhs

Revenueshs

Expenditureshs

-8.0

20122013201420152016201720182019202020212022Q1-Q3

2023

.Intheyearsbeforepandemic,Serbiaeliminatedfiscaldeficit,withgovernmentinvestmentsreachingnear5%ofGDP.Higherdeficitin2020(8.3%ofGDP)wasaconsequenceofhighexpendituresrelatedtopandemic,whilein2021(4.1%ofGDP)mostlyinfluencedbythenewstimuluspackagetocorporatesandhouseholds.

.In2022,afiscaldeficitwasrecordedintheamountofRSD221.2bn(3.2%ofGDP),whichcontinuedthetrendofreducingthefiscaldeficit.Inninemonthsof2023,consolidatedbudgetsurpluswasrecordedatthelevelof0.3%ofGDP.

.In2023,accordingtotherevisedFiscalstrategy,itisplannedtoreducetheshareofthedeficitinGDPto2.8%ofGDP.Inmediumterm,weexpectitsreturntothelevelofaround-1.5%ofGDP.

PublicdebtremainsonadownwardtrajectoryandwithintheMaastrichtcriteria

Chart22Publicdebt(centralgovernment)

(%shareinGDP)

80.070.060.050.040.030.020.010.0.0

70.0

67.8

3

57.953.751.957.056.555.151.

20152016201720182019202020212022September

2023

otherSDRCHFEURUSDRSDPubicdebt

.In2021publicdebtwasreducedto56.5%ofGDP,despitetheissuanceofthreeEurobonds,whichwereintendedtocoverthegrowingfinancialneedsduetothepandemic.In2022publicwasreducedto55.1%ofGDP,despitetheimpactoftheglobalenergycrisisonthegrowthofbudgetexpendituresandtheprocurementofenergysources.

.AttheendofSeptember2023,theshareofpublicdebtinGDPamountedto51.3%andincreasedby0.4pprelativetoAugust,primarilyduetoForeignexchangedifferences.

.Publicdebtisexpectedtoremainonadownwardtrajectoryinthecomingyearswithfurtherreductionofcurrencyrisk.

13

14

MonetaryConditionsweretightenedinthePreviousMonthsThroughtheKeyPolicyRateandRequiredReserveRatio

InNovember2023,thekeypolicyrateremainedunchangedat6.5%

Chart23Interestrates

(in%)

22

KeyPolicyRate

20

DepositFacility

LendingFacility

BELIBOR1W

Averageinterestrateonrepoauction

18

16

14

12

10

8

6

4

2

0

200920102011201220132014201520162017201820192020202120222023

Inmakingsuchdecision,theExecutiveBoardprimarilytookintoaccountthefollowingfactors:

TherequiredreserveratiowasincreasedinSeptember

Chart24Reserverequirementratios

(in%)

50

40

30

20

10

0

FX<2Γ

RSD<2Γ

FX>2Γ

RSD>2Γ

29.0

26.0

23.0

20.0

22.0

19.0

16.0

13.0