Serb Economy Emerges From Recession on Higher Car and Oil Output

Serbia’s economy expanded for the first time in five quarters in the January-March period as increased production of cars and fuel ended a recession.

Gross domestic product grew 1.9 percent from a year earlier after contracting 2 percent in the last three months of 2012, according to a flash estimate by the Statistical Office in the capital Belgrade. The government forecast 2 percent growth this year, which “seems pretty realistic” and would boost budget revenue, Timothy Ash, chief emerging-markets economist with Standard Bank Plc in London, said by e-mail.

“Low base period effects were a key factor herein, but this also shows the impact of the ramping up of production at the Fiat car plant, which could boost car production from 30,000 units in 2012 to perhaps 160-180,000,” Ash said. He referred to Fiat’s factory in central Serbia, a joint venture with the government.

Restarting production at the country’s main refinery in Pancevo, after upgrades also helped boost growth, Ash said. The refinery is owned by OAO Gazprom Neft’s Naftna Industrija Srbije AD.

The government seeks to cut the budget deficit to 3.6 percent of economic output this year from 6.7 percent in 2012.

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