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
Population: 7.3 million
Government type: Republic
Administrative division: 174 municipalities
Capital + other major cities: Belgrade (1.7 million) + Novi Sad (300,000), Nis (250,000), Kragujevac (180,000), Subotica (150,000))
Currency: Serbian dinars (RSD)
Languages: Serbian (official)
Ethnicity: Serb (82.9%), Hungarian (3.9%), Romany/Gypsy (1.4%), Yugoslavs (1.1%), Bosniaks (1.8%), Montenegrin (0.9%), other (8%)
Religion: Serbian Orthodox 85%, Catholic 5.5%, Protestant 1.1%, Muslim 3.2%, unspecified 2.6%, other, unknown, or atheist 2.6%
President: (Mr.) Boris Tadic (since 11 July 2004) Re-elected in May 2012
Prime Minister:(Mr.) Mirko Cvetkovic (since 7 July 2008)
Date of EU accession: Official candidate country since March 2012 |
 |
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. Given its recent high economic growth rates, which averaged 6.3% prior to the global crisis, leading analysts have described Serbia as the “Balkan Tiger”.
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. Other problems include high unemployment (reaching 23.7% in the second half of 2011) and stagnant household incomes.
Between 2006 and 2008, Serbia enjoyed stable growth, averaging at 6% of GDP rate of growth. In 2009, its economy contracted by 3.5%; it started to recover immediately in 2010 (expanding by 1.0%). In 2011, its GDP grew by 1.9%.
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, 2007 - 2012
| |
|
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
| GDP |
|
|
|
|
|
|
|
| Real GDP growth |
% |
5.4 |
3.8 |
-3.5 |
1.0 |
1.9 |
1.5 |
| GDP at current prices |
€ bn |
38.5 |
32.7 |
28.9 |
29.0 |
|
|
| Foreign trade |
|
|
|
|
|
|
|
| Exports |
€ bn |
8.7 |
10.1 |
8.5 |
10.1 |
11.5 |
|
| Imports |
€ bn |
16.0 |
18.8 |
13.6 |
14.8 |
16.8 |
|
| Balance |
€ bn |
-7.3 |
-8.7 |
-5.1 |
-4.7 |
-5.3 |
|
| Prices |
|
|
|
|
|
|
|
| CPI - average inflation rate |
% |
11.0 |
8.6 |
6.6 |
10.3 |
7.0 |
|
| PPI - industry - average |
% |
9.8 |
9.0 |
7.4 |
16.2 |
9.7 |
|
| Employment |
|
|
|
|
|
|
|
| Registered unemployment |
% |
18.0 |
13.6 |
16.1 |
19.2 |
23.7 |
|
| Average monthly gross wage |
€ |
348 |
358 |
338 |
330 |
|
|
| Exchange rates |
|
|
|
|
|
|
|
| RSD/USD average |
|
58.39 |
55.76 |
67.47 |
77.91 |
|
|
| Currency board fixed rate: RSD/EUR |
|
79.96 |
81.44 |
93.95 |
103.04 |
|
|
Source:
KEY SECTORS
The key sectors include food processing and manufacture of base metals, furniture, machinery, chemicals, sugar, tires, textiles, and pharmaceuticals.
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.
INDUSTRY
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. Key markets for Serbian products today are Italy, Bosnia and Herzegovina, Germany, Montenegro and Romania, while imports mainly come from Russia, Germany, Italy, China and Hungary.
The Serbian economy suffers from a constant trade deficit which is the reason why Serbian government strongly supports further industrial development of the country, especially in export oriented sectors and with a focus on automotive, electronics and ICT industries.
With 9.5 million people, the Serbian market is the 2nd largest in South East Europe.
FOREIGN DIRECT INVESTMENT (FDI)
Adopted in 2002, Serbia's Law on Foreign Investments has given equal rights and obligations to both foreign and domestic investors in Serbia. Capital investments benefit from solid legal framework, tax incentives and a liberal customs regime. Since the onset of the new millennium, Serbia has grown into a premier investment location in Central and Eastern Europe. Key foreign investors include Fiat, Telenor, Stada, US Steel, Michelin, Gazprom, Intesa Sanpaolo and many others. Over EUR 12 billion of foreign direct investments has arrived in the past five years.
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