Thomas Lubeck, IFC Regional Manager for Central and South-East Europe – Return of COVID-19 toward the end of the year would worsen the economic outlook

According to the World Bank Group’s estimates, to be able to avoid a more significant decline of the economy and living standards, the Serbian authorities need to provide a substantive and comprehensive response to the crisis, Thomas Lubeck, IFC Regional Manager for Central and South-East Europe, says for eKapija. He adds that it is difficult to predict how long the negative effects of the pandemic will have an impact on Serbia, but that the IFC is already considering the next phase, when the pandemic starts subsiding.

– Initial steps by the government and the National Bank of Serbia were already taken in March. The current outlook due to adverse impacts of the virus outbreak is expected to lead to a small uptick in poverty in 2020, with significant downside risks. Aside from the direct impacts on health outcomes, the anticipated declines in services, lower investments, depressed demand for Serbian exports, and mobility restrictions will hurt jobs and labor income – says Lubeck.

As he says, a more prolonged crisis or the return of the COVID-19 toward the end of the year would worsen the economic outlook and deepen impacts on poverty.

– For that reason, it is hard to anticipate how long the negative effects of the pandemic will affect the country – Lubeck said for our portal.

According to the World Bank Group’s Europe and Central Asia Economic Update, Spring 2020: “Fighting COVID-19”, the COVID-19 pandemic will certainly affect the Serbian economy, leading to a much lower growth than previously projected. The economy is expected to enter a recession in 2020, with a projected drop in the real GDP of 0.5%. Several channels influence the economy of Serbia, including lower tourism and transport revenues, lower remittances, decelerating exports growth and lower FDI and investment overall.

The International Finance Corporation (IFC), a member of the World Bank Group, has secured USD 8 billion in aid to companies affected by the pandemic, in an effort to save jobs.

– The IFC is already communicating with around 300 companies in developing markets so that activities in the private sector would be supported. The response of the IFC is a part of the global response of the World Bank Group, and it is a quick finance package worth USD 14 billion. Although it's too early to talk about the impact on individual countries, Serbia included, the IFC assesses where the help is needed the most.

As he points out, the IFC will support its existing clients in order to help private companies affected by the pandemic to save jobs.

– We have received around 300 requests for financing from companies which are our clients and partner financial institutions from all regions. Our intention is to support those businesses, so that they can continue working and saving the jobs. We are already thinking about the next phase, when the pandemic starts subsiding. The key is in what we can do to quicken the recovery. There's a danger in the recovery being slow, causing a lot of people to lose their jobs. We therefore need to accelerate it as much as we can. Employees at the IFC are ready to help companies restructure and develop new investment projects.

I. Milovanovic

IFC

International Finance Corporation USA

International Finance Corporation IFC

World Bank

Thomas Lubeck

World Bank Group

coronavirus

crisis

coronavirus crisis

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