- 4. 4 - 2. 4 - 2. 6 - 1. 9 - 1. 3 - 1. 1 - 1. 3 net fdi - 0. 8 cad - 0. 6 - 0. 8 - 1. 9 1. 2 - 1 - 2 - 3 - 4 - 5 - 6 - 7 - 8 ( in % of gdp ) source : nbs. * nbs projection. the competitiveness of the serbian economy also increased, reflected in the rise in exports of all areas of manufacturing ( 12. 4 % year - on - year ), except the food industry, which was adversely affected by the diminished agricultural production in the wake of last year ’ s drought. as many as 14 of the 23 areas of manufacturing recorded a high two - digit growth rate in exports in the first quarter. at the same time, the stepped - up pace of investment growth reflected on the higher imports of equipment and intermediate goods, which played a key role in total imports growth ( 11. 9 % year - on - year ). in addition, the net inflow of capital in the first quarter fully covered the current account deficit, contributing to the continuation of appreciation pressures in the foreign exchange market. as for the composition of inflows, foreign direct investment maintained a high inflow, posting growth of around 2 % year - on - year and still channelled to export - oriented sectors. the foreign direct investment inflow was additionally boosted by portfolio investment in conditions of non - residents ’ investment in five - and ten - year dinar government securities. the net inflow of foreign direct investment, which is estimated at around eur 2. 6 billion this year, will ensure the full coverage of the current account deficit for the fourth year straight. in the years ahead, we expect to maintain the full coverage of the current account deficit by long - term external sources of finance, which would support dynamic exports growth in the medium - term. with this in mind, our assessment is that serbia has remained on the path of lowering external imbalances over the medium run. economic activity grew for the tenth consecutive quarter, exceeding our early - year expectations in the first quarter in such conditions, gdp growth accelerated in the first quarter, even more so than we expected in the february inflation report. according to our estimate, a key contribution to the pick - up in growth to 4. 5 % year - on - year in the first quarter came from fixed investment. if the rise in total

in addition to favourable growth prospects of serbia ’ s other important trade partners, this should contribute to further growth in serbia ’ s exports. chart 3 revisions of real gdp growth forecasts for chart 4 movements in gdp and economic activity indicators 2018 and 2019 by the imf of the euro area ( quarterly rates ) ( in % ) 2018 ( previous projection ) 2019 ( previous projection ) 2018 ( new projection ) 2019 ( new projection ) 6. 6 ( in index points ) ( in % ) 6. 4 2. 5 2. 4 2. 0 - 1 2. 9 2. 7 2. 0 1. 5 1. 7 1. 1 - 2 1. 5 - 3 sources : imf weo update ( january 2018 ) and imf weo ( april 2018 ). china russia usa italy germany euro area gdp, s - a ( lhs ) * eurocoin ( lhs ) euro area composite pmi ( rhs ) eurozone economic sentiment indicator ( rhs ) - 4 i iii i iii i iii i iii i iii i iii i iii i iii i iii i iii i 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 sources : eurostat, markit group, banca d ’ italia and european commission. * eurostat preliminary estimate for q1 2018. while global growth forecasts are looking up, developments in certain markets are still veiled in uncertainty. the global commodity market recorded a continued rise in the prices of primary commodities, notably oil, whose price came at usd 78 per barrel in may, the highest since november 2014. the price of oil rose on the back of a sharp pick - up in demand, triggered by accelerated global growth, as well as supply factors, primarily the leading oil exporters capping the production and geopolitical tension. in addition, since the start of the year, the prices of primary agricultural commodities also increased, though to a lower extent. however, the futures and current projections by the relevant institutions indicate that, after this year ’ s growth, we can expect global prices of primary commodities to stabilise and then decline in 2019 and 2020. using that as a starting point, we do not expect any major inflationary pressures on this account over the medium term. however, bearing in mind the high volatility of oil prices in the prior period, as well as the fact that these prices are currently around 50 % higher in year - on - year terms, it is our estimate that their movements require caution