Serbia’s economy contracted 1.3 percent in the first quarter of the year as bad weather in the early months of the year hurt economic activity, according to a flash estimate issued by the statistics office in Belgrade.
The decline in economic output in the first three months of 2012 compares with the central bank’s estimate of a 1.5 percent GDP contraction. The International Monetary Fund sees Serbia’s economy expanding by 0.5 percent in 2012, compared with full-year growth of 1.6 percent last year.
The office also revised figures for the third and fourth quarters of 2011 to 0.6 percent each, from 0.7 percent and 0.4 percent respectively.
Serbia is trying to avoid a second recession in three years as the nation prepares to vote for a new president, parliament and local governments on May 6.
Economic growth this year will largely be driven by consumption, rather than net exports or investments, according to central bank’s April report. The central bank sees net foreign investments declining to 400 million euros ($528.5 million) this year from 1.8 billion euros in 2011.
The central bank has urged policymakers to lower the budget deficit and limit public debt to avoid further weakening of the dinar and give the central bank room to reduce interest rates and spur economic recovery.