Serbia » Outlook

International Property Brokers forecast that the annual current-account deficit will remain large, at an average of 7.1% of GDP in 2006 and 2007. And average annual inflation is expected to slow down during the forecast period.

Recent events have highlighted the weakness of the ruling minority league in Serbia, which is lead by the Democratic Party of Serbia (DSS). The risk of a government fall down in the short term, however, is still low. Nevertheless, the government will be confronted by a series of potentially divisive issues, and Serbia is likely to face a general election before the next scheduled poll at the end of 2007. On October 31st an IMF mission left Belgrade, the Serbian capital, after failing to reach agreement with the authorities regarding the final review of the current three-year arrangement.