SERBIA


Serbia bridges East and West. Its treasured position in the heart of South East Europe makes it an outstanding investment location.

Total area: 77,474 sq. Km (roughly the size of the Czech Republic/ Nebraska); 88,361 sq. Km incl. the disputed Kosovo area
Population: 6.9 million; 8.8 including Kosovo
Government type: Parliamentary republic
Administrative division: Excluding Kosovo: 138 municipalities (opštine) and 23 cities (gradovi). Apart from municipalities, there are also 24 districts (okruzi), with the City of Belgrade constituting an additional district. Serbia has two autonomous provinces (autonomne pokrajine): Vojvodina in the north and claims Kosovo and Metohija in the south.
Capital + other major cities: Belgrade (1.3 million) + Novi Sad (250,000), Nis (200,000), Kragujevac (150,000), Subotica (100,000)
Currency: Serbian dinars (RSD)
Languages: Serbian (official) 88.1%, Hungarian 3.4%, Bosnian 1.9%, Romany 1.4%, other 3.4%, undeclared or unknown 1.8%
Ethnicity: Excl. Kosovo Serb 83.3%, Hungarian 3.5%, Romany 2.1%, Bosniak 2%, other 5.7%, undeclared or unknown 3.4%, in Kosovo 93% are Albanian
Religion: Excl. Kosovo: Serbian Orthodox 84.6%, Catholic 5%, Muslim 3.1%, Protestant 1%, atheist 1.1%, other 0.8%, undeclared or unknown 4.5%; in Kosovo 95.6% of population is Muslim
President: (Mr.) Aleksandar VUCIĆ (since 31 May 2017)
Prime Minister: (Ms.) Ana BRNABIĆ (since 29 June 2017)
Date of EU accession: Official candidate country since March 2012
mapa



KEY FEATURES

  • 2nd largest market in South East Europe
  • Major European corridors’ intersection point
  • Unique in having duty-free access to both EU (as non-member) and to several former Soviet Republics; outside the Commonwealth of Independent States, Serbia is the only country with a Free Trade Agreement with Russia
  • High unemployment rates
  • Started EU membership negotiations in January 2014 with perspective of joining by 2025

Located in the heart of South East Europe, at the doorstep of European Union, Serbia lies on a traditional road that has for centuries connected Europe with the Middle East.

While Serbian economy suffered from isolation during the 90ies, the past twenty years of political and macroeconomic stability have rapidly transformed Serbia into an attractive business environment in Southeast Europe.

In 2008, The Republic of Kosovo declared their independence from Serbia in 2008, a move which Serbia rejects. Initially there were no relations between the two; however following years have seen increased dialogue and co-operation between the governments of Kosovo and Serbia.


MACROECONOMIC OVERVIEW

Serbia‘s transitional economy relies on manufacturing and exports, driven largely by foreign investment. The state sector remains robust, and much needed structural economic reforms have been delayed since the global financial crisis arrived in 2009. Serbia was then long mired in a deep economic crisis, and faces further painful reforms as a condition of EU membership. Other problems include high unemployment (reaching 18.5% in 2015) and stagnant household incomes.

Serbia's unemployment rate, which is relatively low compared to its neighbours in the Balkans (13.8% in 2018 and 13.5% in 2019), remains significantly above the European average. The standard of living of the Serbian population remains considerably lower than the average standard of living of the EU and the informal sector of the country is consistent. However, the authorities have the support of the EU and of the international financial institutions to modernize their infrastructure and support investment in the business community.

Serbia can benefit from a combination of factors such as strategic location, a relatively inexpensive and skilled labour force, and a generous package of incentives for foreign investments.

Selected economic indicators, Serbia, 2012 - 2018

    2012 2013 2014 2015 2016 2017 2018
GDP
Real GDP growth
%
-1.0
2.6
-1.8
0.7
3.3
2.0
4.3
GDP at current prices
€ bn
31.68
34.26
33.32
32.91
38.84
42.19
45.11
Foreign trade
Exports
€ bn
11.92
14.11
14.45
15.69
28.78
34.13
37.12
Imports
€ bn
17.24
17.76
18.07
18.90
28.29
32.95
35.93
Balance
€ bn
-5.32
-3.67
-3.61
-3.21
0.49
1.18
1.19
Prices
CPI - average inflation rate
%
7.3
7.7
2.1
1.4
1.7
3.1
2.1
Employment
Registered unemployment
%
23.1
23.0
20.1
18.5
15.9
14.1
13.8
Average monthly gross wage
508
535
524
507
539
560
583
Exchange rates
RSD/USD average
88.17
85.17
88.41
108.73
111.29
104.79
100.27
Currency board fixed rate: RSD/EUR
113.13
113.14
117.23
120.67
123.11
121.33
118.27

Source: Statistical Office of the Republic of Serbia, National Bank of Serbia, IMF, Eurostat, 2017-2018



KEY SECTORS

Serbian industry today represents a diversified mix of focus on agriculturally fruitful land and experience in manufacturing industry. Traditionally based on cooperation with Western European companies, key sectors in Serbia are base metal, food, electronics, clothing, pharmaceutical and automotive industry.

Serbia is the leading exporter of food and agricultural products in the Balkan region. Unlike other countries where food business is controlled by a few big industrial groups, Serbia’s food industry is dominated by many small companies. Serbia supplies the EU market and Russia with fresh, frozen and preserved fruit and vegetables, spirits, confectionery products and meat products. Serbia is the largest provider of frozen fruit to the French and German market and the sector is one of the few recording a trade surplus.

Automotive industry (with Fiat Chrysler Automobiles as a forebearer) is dominated by cluster located in Kragujevac and its vicinity, and contributes to export with about €1.7 billion. Around 60 international investors have invested over €1.7 billion in the sector, creating more than 27,000 jobs. The Serbian automotive industry supplies almost all major European and some Asian car manufacturers. The manufacturing of vehicle chassis system parts, especially tires and suspension parts is the most prominent activity in the industry, followed by electrical system components.

Shoulder to shoulder with food, production and automotive sector, ICT is becoming one of the pillars of the Serbian economy. A large number of Serbian ICT companies offer very strong technical skills that have attracted partnerships with international firms and won them a place in high-value market niches. Serbia is- home to 1,600 innovative IT Companies employing more than 14,000 people and houses Microsoft’s 4th world development centre. Serbia notably manufactures intel smartphones named Tesla smartphones.

Metal-processing and machine building industry is one of Serbia’s core industries with the longest manufacturing tradition and accounts for 20% of the Serbian exports. Large companies dominate the first part of the value chain, with significant economies of scale (production of primary metals, primary processing of metals), while the companies operating in the processing and manufacture of metal products subsectors are more specialized and customer-oriented SME's. Serbia has significant quantities of coal, lead, zinc, copper and gold, but the lack of investment, which has affected the mining sector for several years, prevents the country's economy from benefiting from this wealth.


FOREIGN DIRECT INVESTMENT (FDI)

Since 2000, Serbia has attracted over $40 billion in foreign direct investment (FDI).Blue-chip corporations making investments include: Fiat Chrysler Automobiles, Siemens, Bosch, Philip Morris, Michelin, Coca-Cola, Carlsberg and others. In the energy sector, Russian energy giants, Gazprom and Lukoil have made large investments. In metallurgy sector, Chinese steel and copper giants, Hesteel and Zijin Mining have acquired key complexes.


EXPORTS & IMPORTS


Serbia has an unfavourable trade balance: imports exceed exports by 25%. Serbia's exports, however, recorded a steady growth in last couple of years reaching $19.2 billion in 2018. The country has free trade agreements with the EFTA and CEFTA, a preferential trade regime with the European Union, a Generalised System of Preferences with the United States, and individual free trade agreements with Russia, Belarus, Kazakhstan, and Turkey.


2017 export and import data:




Main import partners:
Germany - 12.7%
Italy - 10%
China - 8.2%
Russia - 7.3%
Hungary - 4.9%


Main export partners:
Italy - 13.5%
Germany - 12.8%
Bosnia Herzegovina - 8.2%
Russia - 6%
Romania - 4.9%


Serbia external trade - 2015



See references for our track record in Serbia.



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