Economic Overview

After taking a while to stabilize both politically and economically since 2001, the economic reform      process  in Serbia has shown good results with growth rates around 6% achieved in 2006/2007/2008.

In 2009 however mainly due to the effects the global economic crisis had on Serbian exports and investments coming in to the country, a negative growth and contraction of GDP of -2.9% was recorded. Though agriculture mining and energy sectors were stable, in 2009 industrial production dropped by 12.1 % and a drop in manufacturing of 15.8% was also registered. The Serbian economy was pressured by lack of liquidity and the depreciation of the Dinar. In 2009 due to effects of the global crisis the Serbian Dinar weakened close to 8%, which had big impact on the wages, consumer spending and the macro- economic stability in the Serbian economy. Foreign direct investment dropped around 40% as Serbia recorded USD 1.7 billion of FDI’s in 2009 compared to around USD 3 billion in 2008.

To restore macro-economic stability the Serbian Government entered into an agreement with IMF for grant of USD 4.5 billion loan for the period of two years, out of which USD 3 billion was available for drawl in 2009. The essence of the agreement was that these funds would be transferred to the reserves of the National Bank of Serbia to maintain financial and monetary stability. In return the Serbian Government had made an agreement with the IMF to reduce state spending and adjustment to the level of budgetary revenues.

One of the positive developments in 2009, was the ratification of Interim Trade Agreement with Serbia by EU members. The Interim Trade Agreement between Serbia and the EU provides for the establishment of a free trade area between those two entities and regulates some important aspects such protecting competition and controlling EU aid to Serbia. The Interim Agreement guarantees that the EU market will remain open to virtually all Serbian products, as it includes trade concessions that the EU has granted to Serbia since 2000. It also provides for the gradual opening of the Serbian market to EU products over the forthcoming 5-year period.

Standards & Poor's credit rating agency improved Serbia’s credit rating from BB minus to BB stable. This assessment was based on the view that external pressures on Serbia have lessened and budget consolidation will appear mid-term in accordance with the International Monetary Fund (IMF) program. Dun & Bradstreet credit rating agency, however retained its DB5a rating for Serbia, making it a high-risk country for doing business in.

Serbia is becoming a very interesting destination for foreign investments as it has free trade agreement with the EU, Russia, Turkey and Belarus. The Serbian Government is now shaping an attractive environment for doing business, while legislative activities are intensely bringing the legal framework in line with the EU regulations, with the goal to become a full member of the EU within the next decade.

In Serbia businesses can enjoy all the benefits of working outside the EU, while being able to provide services and goods cost effectively to the EU market.  Serbia has a very good geographic position as it lies on two European Corridors , the highway  Corridor X linking by road  Western Europe , Turkey and the Middle East, and the river Corridor VII  (Rhine–Main–Danube) allowing goods to be transported cost effectively and linking the heart of Europe to the Black Sea.

Key Industries in Serbia are Agriculture & Food Processing, Steel & Metal Industry, Textile Industry Energy & Mining , Automotive & Components Industry , ICT and Wood & Furniture Industry.

Key Economic Indicators:

GDP in Serbia     :     USD  43.1  billion  (Year 2009)
GDP in Serbia     :     USD 44.37  billion   (Year 2008)
GDP per capita   :     USD  5,873            (Year 2009)
GDP per capita   :     USD  5,913              (Year 2008)
External Trade   :     USD 23.93  billion,
Exports             :     USD   8.34  billion,
Imports            :      USD 15.58   billion,
GDP Growth rate : -2.9%  (Year 2009)
Expected GDP growth rate :  1.5%  (Year 2010)
Foreign Exchange Reserves :   USD  17.33 billion