Serbia Business Guide

Serbia has a transitional economy largely dominated by market forces, but the state sector remains significant in certain areas and many institutional reforms are needed. The economy relies on manufacturing and exports, driven largely by foreign investment. MILOSEVIC-era mismanagement of the economy, an extended period of international economic sanctions, civil war, and the damage to Yugoslavia's infrastructure and industry during the NATO airstrikes in 1999 left the economy only half the size it was in 1990. After the ousting of former Federal Yugoslav President MILOSEVIC in September 2000, the Democratic Opposition of Serbia (DOS) coalition government implemented stabilization measures and embarked on a market reform program. After renewing its membership in the IMF in December 2000, Serbia continued to reintegrate into the international community by rejoining the World Bank (IBRD) and the European Bank for Reconstruction and Development (EBRD). Serbia has made progress in trade liberalization and enterprise restructuring and privatization, but many large enterprises - including the power utilities, telecommunications company, natural gas company, and others - remain in state hands. Serbia has made some progress towards EU membership, signing a Stabilization and Association Agreement with Brussels in May 2008, and with full implementation of the Interim Trade Agreement with the EU in February 2010, gained candidate status in March 2012. In January 2014, Serbia's EU accession talks officially opened. Serbia's negotiations with the World Trade Organization are advanced, with the country's complete ban on the trade and cultivation of agricultural biotechnology products representing the primary remaining obstacle to accession. Serbia's program with the IMF was frozen in early 2012 because the 2012 budget approved by parliament deviated from the program parameters; the arrangement is now void. However, an IMF mission visited Serbia in February 2014 to initiate discussions with Serbian authorities on a possible new IMF arrangement and these talks will continue following the formation of the new government. High unemployment and stagnant household incomes are ongoing political and economic problems. Structural economic reforms needed to ensure the country's long-term prosperity have largely stalled since the onset of the global financial crisis. Growing budget deficits constrain the use of stimulus efforts to revive the economy and contribute to growing concern of a public debt crisis, given that Serbia's total public debt as a share of GDP doubled between 2008 and 2013. Serbia's concerns about inflation and exchange-rate stability may preclude the use of expansionary monetary policy. During the recent election campaign, the victorious SNS party promised comprehensive economic reform during the first half of 2014 to address issues with the fiscal deficit, state-owned enterprises, the labor market, construction permits, bankruptcy and privatization, and other areas. Major challenges ahead include: high unemployment rates and the need for job creation; high government expenditures for salaries, pensions, healthcare, and unemployment benefits; a growing need for new government borrowing; rising public and private foreign debt; attracting new foreign direct investment; and getting the IMF program back on track. Other serious longer-term challenges include an inefficient judicial system, high levels of corruption, and an aging population. Factors favorable to Serbia's economic growth include its strategic location, a relatively inexpensive and skilled labor force, and free trade agreements with the EU, Russia, Turkey, and countries that are members of the Central European Free Trade Agreement (CEFTA).


GDP (purchasing power parity):
country comparison to the world: 81

GDP (official exchange rate):


GDP - composition, by sector of origin:
agriculture:7.9%

wheat, maize, sunflower, sugar beets, fruits (raspberries, apples, sour cherries), vegetables (tomatoes, peppers, potatoes), beef, pork, and meat products, milk and dairy products, grapes/wine


Industries:

20.1% (2013 est.)

9.1% (2013 est.)


Distribution of family income - Gini index:
country comparison to the world: 72

Budget:
revenues:$17.47 billion

40% of GDP (2013 est.)

-4.9% of GDP (2013 est.)

61.2% of GDP (2013 est.)

2.2% (2013 est.)

9.5% (18 March 2014)

13.85% (31 December 2013 est.)

$4.626 billion (31 December 2013 est.)

$20.47 billion (31 December 2013 est.)

$25.48 billion (31 December 2013 est.)

$9.199 billion (31 December 2013 est.)


Current account balance:
country comparison to the world: 137

Exports:
country comparison to the world: 82

Exports - commodities:

37.65 billion kWh (2013 est.)

28.04 billion kWh (2013 est.)

5.707 billion kWh (2013 est.)

5.835 billion kWh (2013 est.)

7.379 million kW (2013 est.)

57.5% of total installed capacity (2013 est.)

0% of total installed capacity (2013 est.)

39% of total installed capacity (2013 est.)

3.5% of total installed capacity (2013 est.)

24,500 bbl/day (2013 est.)

0 bbl/day (2013 est.)

33,330 bbl/day (2013 est.)

77.5 million bbl (1 January 2013 est.)

65,720 bbl/day (2013 est.)

72,770 bbl/day (2013 est.)

16,060 bbl/day (2013 est.)

31,120 bbl/day (2013 est.)

484.7 million cu m (2013 est.)

2.827 billion cu m (2013 est.)

0 cu m (2013 est.)

2.45 billion cu m (2013 est.)

48.14 billion cu m (1 January 2013 est.)

62 million Mt (2013 est.)

2.977 million (2012)

9.138 million (2012)

general assessment:replacements of, and upgrades to, telecommunications equipment damaged during the 1999 war has resulted in a modern digitalized telecommunications system

.rs


Internet hosts:
country comparison to the world: 44


Internet users:
country comparison to the world: 57

26 (2013)

2.21% of GDP (2012)