World Bank Allocates $65 Million for Serbia's Railway Infrastructure Modernization

The new funding builds on Serbia's substantial investment in expanding its rail network, which has exceeded $2.3 billion in recent years.

Devdiscourse News Desk | Washington DC | Updated: 04-09-2024 15:24 IST | Created: 04-09-2024 15:24 IST

World Bank Allocates $65 Million for Serbia's Railway Infrastructure Modernization

World Bank Highlights India's Robust Economic Growth and Calls for Trade Diversification to Achieve $1 Trillion Export Goal" Article: The Indian economy continues to grow steadily, despite global challenges, as highlighted in the latest India Development Update (IDU) from the World Bank titled India’s Trade Opportunities in a Changing Global Context. The report emphasizes that while India is on track to sustain its rapid economic growth, it must diversify its export basket and strengthen global value chain integration to reach its ambitious target of $1 trillion in merchandise exports by 2030. According to the IDU, India maintained its status as the fastest-growing major economy, recording a remarkable 8.2 percent growth rate in FY23/24. This growth was driven by significant public infrastructure investments and increased household investments in real estate. On the supply side, the manufacturing sector experienced robust growth of 9.9 percent, complemented by resilient service activities, which helped offset the agricultural sector's underperformance. Urban unemployment rates have gradually improved since the pandemic, particularly for women, with female urban unemployment dropping to 8.5 percent in early FY24/25. However, urban youth unemployment remains high at 17 percent. India's economic momentum is further supported by a narrowing current account deficit and strong foreign portfolio investment inflows, pushing foreign exchange reserves to an all-time high of $670.1 billion in early August—equivalent to over 11 months of import cover in FY23/24 terms. Despite the challenging global environment, the World Bank projects India's medium-term economic outlook to remain positive. Growth is forecasted at 7 percent in FY24/25, with continued strength expected in FY25/26 and FY26/27. Additionally, with robust revenue growth and ongoing fiscal consolidation, India's debt-to-GDP ratio is anticipated to decrease from 83.9 percent in FY23/24 to 82 percent by FY26/27. The current account deficit is expected to remain stable, ranging between 1 to 1.6 percent of GDP during this period. The report underscores the critical role of trade in bolstering India's economic growth. In the face of increased global protectionism and post-pandemic shifts in global value chains, India has seized opportunities to enhance its competitiveness through initiatives like the National Logistics Policy and digital reforms that reduce trade costs. However, the report also cautions that rising tariff and non-tariff barriers could hinder trade-focused investments. "India's strong growth prospects, coupled with declining inflation, will help to alleviate extreme poverty," said Auguste Tano Kouame, the World Bank's Country Director in India. "To accelerate growth further, India should fully leverage its global trade potential. Beyond its strengths in IT, business services, and pharmaceuticals, India can diversify its export portfolio by increasing exports in textiles, apparel, footwear, electronics, and green technology products." The IDU outlines a three-pronged strategy for achieving the $1 trillion merchandise export target, emphasizing the need to reduce trade costs, lower trade barriers, and deepen trade integration. "India's share in global apparel exports has declined from 4 percent in 2018 to 3 percent in 2022 due to rising production costs and decreasing productivity," noted Nora Dihel and Ran Li, Senior Economists and co-authors of the report. "By integrating more deeply into global value chains, India can create more trade-related jobs and unlock opportunities for innovation and productivity growth." This strategic focus on trade diversification and integration is vital for India to sustain its economic momentum and realize its export ambitions by 2030. Image Credit:

Serbia is set to enhance the maintenance of its railway infrastructure with a new $65 million investment from the World Bank. This funding represents the second tranche of the Multiphase Programmatic Approach (MPA) for the Serbia Railway Sector Modernization Project, aimed at advancing the country’s rail sector to be safer, more efficient, and climate-friendly.

The new funding builds on Serbia's substantial investment in expanding its rail network, which has exceeded $2.3 billion in recent years. With ongoing efforts expected to continue for another five to six years, regular maintenance is crucial to protect these significant public investments and ensure the quality and safety of Serbia's critical transportation services.

“Through this phase of the project, we aim to enhance our capacity to maintain the existing rail infrastructure more effectively, modernize railway maintenance facilities, and improve asset management and planning,” said Nicola Pontara, World Bank Country Manager for Serbia. “This phase also presents an opportunity for greater private sector involvement in intermodal interventions and last-mile connectivity.”

Similar to Phase 1 of this MPA, this stage of the project is co-financed equally by the World Bank and the French Development Agency. This collaboration reflects the alignment of both institutions' priorities in promoting green transport and regional integration.

The investment is expected to play a crucial role in the ongoing modernization and maintenance of Serbia's rail infrastructure, contributing to the development of a more sustainable and efficient rail network.