Information on Serbia as a market.
Serbia formed a new government in early 2014 lead by Aleksandar Vucic and the Serbian Progressive Party (SNS). This SNS government was re-elected in 2016 and has the EU-accession process and economic reforms as the number one priority. Therefore, structural reforms are ongoing. This has resulted in a number of reforms including a new labor law, building and construction law, bankruptcy legislation and budget cuts. Present and future focus is privatization of state-owned companies but also further improvement and simplification of the business regulations not to mention liberalization of the energy sector.
Despite the fact that Serbia has a transitional economy dominated by market forces, the state sector remains significant in certain areas. However, with a government that has structural reforms on the agenda the state sector should be on a path of improvement.
Serbia has also made significant progress towards EU membership, becoming a candidate country for membership in the EU in March 2012. In January 2014, accession talks officially opened. The EU accession path will lead Serbia into more reforms and alignment with the EU standards and regulation. Also renewing its membership in the IMF in December 2000, Serbia showed continuous will to reintegrate into the international community by rejoining the World Bank (IBRD) and the European Bank for Reconstruction and Development (EBRD). Serbia is not yet a member of the WTO.
The main drivers of the Serbian economy are industrial production, agriculture/food production, foreign investment and exports. Serbia’s foreign trade has seen continuous growth in the past several years. One reason is Serbia’s many free trade agreements reaching out to almost 1 billion consumers. Among others the FTA’s are with the EU, Russia, Turkey, and countries that are members of the Central European Free Trade Agreement (CEFTA).
An important factor contributing to modernization and competiveness of the Serbian market are the foreign direct investments that Serbia has managed to attract in the past years, since its market has started to increasingly internationalize. The foreign investments are also linked to Serbia’s relatively inexpensive but educated and skilled labor force. Serbia’s unemployment rate is decreasing, but is still high. Serbia also benefits from its strategic location – being on the main road corridor between the East and West. Furthermore, investments in Serbia’s infrastructure are increasing with funds from the EU.
Read the newest update on Serbian economy from IMF here.
For more information on the Serbian, Bosnian, Montenegrin markets please contact Søren Engelbrecht Hansen.