Economic growth below potential due to weak institutions
The economic growth of Serbia is below the level where it could potentially be due to weak institutions, especially the rule of law and corruption control, and is the biggest economic problem, the Fiscal Council of the Government of Serbia has announced. The next factor slowing down the economic growth, according to their analysis “Why the economic growth of Serbia is lagging behind”, are low investments, especially the insufficient private investments, primarily due to the weak rule of law and a high degree of corruption. The Fiscal Council says in its analysis, which will be presented at the Kopaonik business forum, that the economic growth is also slowed down by the flaws in the education system. The economy of Serbia is currently growing at a rate nearly two percentage points below its potential, that is, at slightly over 3%, instead of the potential 5% – the Fiscal Council said.
Volkswagen to make SUV models of Seat and Skoda in Serbia?
After the announcement that German Volkswagen will build a factory in Serbia, Novosti writes that it is becoming more certain that the production of SUV vehicles from Skoda's and Seat's family of products will be organized at the new facilities. The models in question are Skoda Karoq and Seat Ateca. The production of these models will be moved to Serbia from the Czech municipality of Kvasiny, which will instead take over the production of VW Passat. That this is a big rearrangement within the German car giant is also proven by the fact that the factories in Emden and Hanover, where Passat has been assembled so far, will specialize in electric models. In addition to Karoq and Ateca, the future factory in Serbia will produce another three models. Still, as the daily writes, the management of the German group still needs to definitively confirm the plan to invest EUR 1.4 billion in Serbia, although, as Novosti's sources claim, this is a mere formality. The first models might leave the facility in Serbia in 2023.
Budget surplus of RSD 32.2 billion at end-2018 – Public debt at 53.6% of GDP
The budget of Serbia had a surplus of RSD 32.2 billion at the end of 2018, as the revenues amounted to RSD 1,179.2 billion, whereas the expenditures amounted to RSD 1,147 billion, the Ministry of Finance announced. The consolidated surplus was also RSD 32.2 billion, amounting to 0.6% of the gross domestic product (GDP), whereas the primary fiscal surplus amounted to RSD 139.4 billion, that is, 2.7% of the GDP. A deficit of RSD 32 billion was planned for 2018, which means that the result realized is better by RSD 64.2 billion than planned, the Ministry of Finance pointed out. In December 2018, the public debt of Serbia amounted to EUR 23.01 billion and had a share of 53.6% of the GDP.
Mihajlovic, World Bank delegation discuss new projects
Serbian Minister of Construction, Transport and Infrastructure Zorana Mihajlovic said Friday Serbia had made major progress in motorway construction and railway reconstruction and that a new investment cycle - worth over 5 bln euros and focused on better connectivity with the region - would be launched in 2019. They also discussed the effects of construction of new transport routes on transit traffic, as well as plans to fund road maintenance as part of a road sector reform, according to a statement from Mihajlovic's office.
Stocks rise, pushing the S&P 500 to close above key 2,800 level for the first time since November, Europe markets close higher after fresh US-China trade comments, European markets close higher on Sino-US trade deal hopes, Daily Mail shares up 4.6%
Stocks staged a marked turnaround Monday as the S&P 500 sank back below a key chart level and a trade resolution between the U.S. and China had long been expected by traders. The S&P 500 dropped 0.4 percent after climbing nearly half a percent, breaking back below the key 2,800 level. The broad index closed above 2,800 on Friday, marking its highest close since Nov. 8. The Dow Jones Industrial Average fell 204 points, erasing a 129.66-point gain. Boeing was one of the worst performers in the Dow, sliding 1.8 percent. The Nasdaq Composite closed 0.2 percent lower. Earlier in the day, it was up as much as 0.64 percent.
Stocks started giving back their gains after the Commerce Department said construction spending dropped 0.6 percent in December. Economists polled by Refinitiv had forecast a gain of 0.2 percent. The indexes also rolled over as the S&P 500 tech sector fell 0.4 percent. Shares of Salesforce were the biggest decliners in the sector, sliding more than 3 percent ahead of their quarterly earnings release.
Equities began the session on a positive note, with equities up after the opening bell on news that a trade deal between the U.S. and China was nearing completion. Many investors, however, decided to sell on the upbeat headlines and argued that the indexes had already accounted for an agreement between the two economic powerhouses.
European stocks traded higher Monday, as investors digested the latest news surrounding trade discussions between the U.S. and China. The pan-European Stoxx 600 provisionally closed 0.23 percent higher with almost every sector in positive territory. Basic resources were the top performers, with the sector sensitive to news on global trade developments.
In terms of stocks, Daily Mail and General Trust shares rose more than 4.4 percent. This followed news that the company is to return £896 million ($1.19 billion) to shareholders.