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With cautious optimism, the Serbian economy entered the second quarter of 2021, which is expected to be a turning point in the economic recovery and contribute to the planned growth of gross domestic product (GDP) between five and six percent.
Most businessmen expect growth in turnover, exports, investments, stable or higher employment, while demand on the domestic market is still the dominant condition for business improvement and higher utilization of production capacities, the April Survey of the Serbian Chamber of Commerce on business activity showed.
The research included 1,272 economic entities that employ about 255,000 workers, and last year together they reached exports worth five billion euros, which is almost a third of the total exports.
More than half of the respondents expect higher turnover in the second quarter compared to the beginning of the year, and only 11 percent lower. Businessmen are also optimistic about the realization of export business – exactly half expect growth, with 40 percent of those who predict an unchanged level of exports.
In the first three months of 2021, 44 percent of the surveyed companies invested. Compared to the realized investments in the previous quarter, 75% of companies realized the same or increased level of investments. Businessmen’s expectations for the second quarter of 2021 are positive – 90 percent of respondents plan the same or a larger volume of investment, mostly in equipment.
The analysis of PKS indicates that micro-enterprises face the biggest investment challenges, only a fifth of respondents expect an increase in investment, unlike medium and large companies, half of which announce more investments in the second quarter of 2021.
It is encouraging that 47 percent of respondents have sufficient funds to finance their business, and mostly use their own funds (80 percent) and loans (17 percent).
Since the beginning of the year, employment has been stable, 85 percent of respondents have maintained or increased the number of employees, while 96 percent have no plans to lay off.
The April report of the International Monetary Fund on the prospects of the world economy in Serbia estimates this year’s growth of five percent. Although most economic activities have relatively favorable conditions for recovery and continued growth, the service sector, tourism, catering, entertainment, passenger traffic and many other small businesses continue to suffer the effects of the pandemic.
The key challenge of the economic policy of the Government of Serbia in the coming period remains the achievement of an optimal balance between supporting the economy and preserving macroeconomic stability, as the basis for credit rating and investor confidence.
Despite global optimism and the accelerated vaccination process in the United States and Europe, epidemiological risks remain, especially due to the deteriorating health situation in India.
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