Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic said yesterday that the expected economic growth for Serbia this year is between 1.5% and 2%.

Dinkic announced at a session of the Business Council of the Ministry of Economy and Regional Development that in the first quarter of the year GDP growth was 0.6%, in the second quarter 2.1%, while in the third quarter the expected growth is between 2% and 2.5%.

The expected value of next year’s foreign direct investment is at least $4 billion, including the privatisation of Telekom Srbija.

The funds from investment next year will be used for building infrastructure, which should boost the construction industry, which has been the main cause of low economic growth this year.

Dinkic underlined that there has been positive movement in foreign trade and that exports grew by 20.3%, imports by 7%, and the foreign trade deficit was reduced by 7%.

In the period January-August 2010, industrial production grew by 4.7%, Dinkic specified and added that a 10% drop was recorded in the construction industry field, tourism and hospitality.

Dinkic described as favourable the fact that Serbia’s exports to the most developed EU countries are growing, first of all to Italy as Serbia’s first-ranked export destination, followed by Bosnia-Herzegovina and Germany.

Exports to Romania and Russia have also grown considerably and Serbia’s main products for exports are iron and steel, electricity, copper products, electrical machines and parts, plastic masses and cereals.

Serbia’s aim is to enable more extensive exports of finished products through new investment and not to export only raw materials and intermediate goods, Dinkic emphasised.

He affirmed that the balance of payment deficit has grown due to a lower inflow of remittances of almost €400 million this year.

Dinkic explained that so far around €1.4 billion in subsidised loans has been approved to companies and citizens through commercial banks, while €1.1 billion was approved for the whole of last year.

He announced that the programme of subsidised loans for company liquidity and investment and consumer loans for the purchase of domestic products will be continued in 2011.

However, he said that as of 1 January subsidised cash loans will be abolished because salaries and pensions in the public sector will be increased as of New Year, as the freezing of these was the reason for introducing this type of loan.

Representatives of almost 30 biggest Serbian companies are taking part in the session of the Business Council.