With the markets and the economy seeing continued effects from the COVID-19 pandemic, many investors are turning their attention toward 2022. Which trends and concerns could shape the investment landscape in 2022?
The global economy entered 2022 in a weaker position than previously expected. The COVID-19 pandemic continues to maintain its grip, while rising energy prices and supply disruptions have fueled higher and more broad-based inflation. The 2022 economic outlook will be shaped by various factors. There is a concern that the new COVID-19 variants could induce further economic disruptions. Moreover, supply disruptions, energy price volatility, and wage pressures raise uncertainty around inflation and policy responses. As advanced economies tighten monetary policies, risks to financial stability and emerging market and developing economies’ capital flows, currencies, and fiscal positions may emerge. Beyond these, the climate change raises the probability of natural disasters. In this context, effective international cooperation will be essential.
How would you rate the overall impact of the crisis on the Serbian economy and which direction should we take to overcome consequences and continue with the growth?
The Serbian economy has weathered the ongoing pandemic well. Macroeconomic and financial stability have been maintained, while economic growth in 2021 exceeded expectations. We expect economic activity to remain robust in 2022, yet the outlook is highly uncertain. Risks center on the path of the pandemic and external conditions, including the recovery pace in trading partners, global financial conditions, and energy challenges. It is important that agile and targeted policies continue to support the recovery and ensure macroeconomic and financial stability. At the same time, further reforms are needed to underpin high, inclusive, and greener growth. A stronger medium-term budget framework and fiscal rules should underpin fiscal discipline. Strengthening the governance and management of state-owned enterprises is critical, while efforts to improve the business environment should continue to help attract investments. Developing domestic capital markets would enhance financial deepening and support medium-term growth. Finally, promoting green growth and enhancing the social safety net would ensure a more sustainable development.