Although we expect a modest recovery this year – we forecast GDP growth will rise 1.9% in 2013 – Serbian households are set for another difficult year in 2013, weighed down by fiscal austerity measures and high unemployment. The government’s 2013 budget caps increases in public sector wages well below inflation, while it also hikes the VAT rate by two percentage points. These factors will curb vehicle sales. Italian auto manufacturer Fiat announced in March 2013 that it expects production at its Serbia factory to reach between 110,000 and 150,000 units in 2013 following strong output levels over the last …
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