The European Bank for Reconstruction and Development (EBRD) corrected Friday its projection of Serbia's GDP growth from 2.9 percent stated in May to 3.3 percent, also raising the projections for the entire region, comprising 29 countries undergoing transition, from 4.6 to 4.8 percent.

The latest EBRD report on the region's economic outlook says the projections for 2012 have remained the same, at 4.4 percent.

The Western Balkans' economic expectations are improving, because Bosnia-Herzegovina, Macedonia and Serbia are benefiting from an increase in global demand for the products of the local metal industry.

Serbia's GDP growth is supported by large infrastructure projects and a government programme for loan subsidies.

The 12.7 percent June inflation in Serbia is cause for concern, but the EBRD expects the figure to drop significantly in the second half of the year.

The bank warns of increasing risk to future growth.

The worsening debt crisis in the eurozone could seriously threaten the growth and recovery of the region, especially in Southeastern Europe and new EU members, EBRD Chief Economist Eric Berglof stated.

Certain areas in the region covered by the EBRD will be affected negatively by the escalation of the eurozone crisis, depending on the circumstances, the report notes.

The EBRD pointed out that Southeastern Europe's economic recovery was still weak and that the area was under threat from the instability caused by the eurozone crisis, since a large number of the banks in the region are based in Greece.