Economy of Serbia

Serbia
World economic rank	76th ( nominal ) / 76th ( PPP )
currency	dinar
Conversion rate	1 dinar = 0.01034 EUR
Key figures
Gross domestic product (GDP)	2013 $ 42.492 billion (nominal) $ 89.733 billion (PPP)
GDP per capita	2013 $ 5,902 (nominal) $ 12,464 (PPP)
GDP by economic sector	Agriculture : 12.6% (2010) Industry : 21.9% (2010) Services : 65.5% (2010)
growth	▲ 2.5% (2013)
inflation rate	6.2% (2010)
Employed	2.322 million (2014)
Employed persons by economic sector	Agriculture : 19% (2013) Industry : 25.5% (2013) Services : 50.5% (2013)
Unemployed	0.761 million (2014)
Unemployment rate	16.8% (2014)
Foreign trade
Export goods	Iron, steel, textiles, rubber products, wheat, fruits, vegetables and non-ferrous metals
Export partner	Germany , Bosnia and Herzegovina , Italy , Montenegro , Romania
Import goods	Oil and oil derivatives, automobiles, gas, electrical appliances and industrial machinery
Import partner	Russia , Germany , Italy , China , France
International direct investment (FDI)	From 2001 to 2009: € 12.2 billion invested directly in Serbia
public finances

This article deals with the situation and development of the economy of Serbia since 2000.

Economic development since the breakup of Yugoslavia

See also : Serbia's accession negotiations with the European Union

The Yugoslav wars in the 1990s and the associated UN sanctions severely hampered the country's development. The traces of the destruction caused by the NATO bombing during the Kosovo war of 1998/99 have still not been removed everywhere. Since the collapse of the Milošević regime, however, the Serbian governments have been striving to establish a western-oriented economy . Since 2000, Serbia has had great successes in macroeconomic stabilization and structural reforms, for example in the financial and energy sectors. State-owned companies have been privatized in many areas in recent years.

From 2000 to 2008 inclusive, Serbia's war and embargo economy was one of the fastest growing in Europe, mainly due to increased foreign investment, with an annual growth rate of over five percent. The geostrategic location of Serbia in the Balkans with borders to eight neighboring countries and the intersection of the Pan-European Transport Corridors 10 and, together with the tax relief introduced in recent years, together with a clear European perspective, means that foreign companies are expanding their presence in Serbia . State-owned companies have been privatized in many areas in recent years, such as B. in the pharmaceutical, energy, food, chemical and financial sectors. From 2001 to 2009, 12.2 billion euros were invested directly in Serbia, which resulted in around 800 companies with foreign participation being registered in Serbia in 2010. Nevertheless, the state still plays a role as an economic factor. The Serbian airline Air Serbia (formerly Jat Airways) , the Serbian railways Železnice Srbije and the energy supplier EPS are still state-owned. The Serbian state intends to sell a larger share of Telekom Srbija , which is still majority-owned . In 2009, Telecom was the most successful public company with a profit of RSD 15.5 billion and the railway was the most losing public company with a decrease of RSD 6.2 billion.

In a World Bank report published in mid-September 2005 , Serbia was named as a leading reform country in the field of business development and job creation. In 2008, two studies identified Serbia as a promising investment location. According to PricewaterhouseCoopers , the reduction in political risk, the low business costs, the increase in the gross national product per inhabitant, the proximity to the European market and the low corporate income tax rate of ten percent are the main reasons for this. The positive effects of rapprochement with the EU, which brought about the reduction in investment risk, are also mentioned.

Due to the strict requirements of the Serbian National Bank and a lack of attractiveness for speculative investors, Serbia is one of the most highly capitalized and most stable banking markets. This also contributed to the fact that the decline in economic output in Serbia in the crisis year 2009 was less than in the entire region of Southeastern Europe (−5.4%). Since 2008, however, the country's economic situation has deteriorated considerably. In 2009 economic output fell by 3.1%. The reasons for this development were the decline in consumer demand , lending and foreign direct investment . A stand-by loan from the IMF in the amount of three billion euros, which was linked to cuts in public spending, provided relief . Other effects of the crisis year 2009 were the rise in absolute poverty by 1.4 percentage points to 8.8% and unemployment by 2 percentage points to 19.4% in 2010.

In the following year 2010, the economy recovered slightly with growth of around 1.8%.

The KfW Development Bank estimated the share of the shadow economy at 30 to 50 percent of GDP for 2009 . The contribution of the private sector to economic output was relatively small in 2010 at around 55 percent. The share of GDP of the industrial sector, including mining, electricity, gas, and water management, was around 21.9% in 2010, agriculture at 12.6% and the service sector at around 65.5%. The industrial sector employed 20.5%, the agricultural sector 23.9% and the service sector 55.6% of the working population in 2009.

In 2010 there were 2.95 million people of working age in Serbia. The average net wage in 2009 was the equivalent of 335 euros per month. Inflation in 2010 was around 6.2%. The proportion of the population living below the relative poverty line , which is defined as 60% of median income , was 13.2% in 2008, 3.3 percentage points below the EU average of 16.5%. The share of those below the absolute poverty line , which is a monthly income of € 80, was 7.9% in 2008.

Import / export

Main export products from Serbia are iron, steel, textiles, rubber products, wheat, fruits, vegetables and non-ferrous metals. The main imports are oil and oil derivatives, automobiles, gas, electrical appliances and industrial machinery. Most of the imports are from Russia, followed by Germany, Italy, China and France. The main exports are to Bosnia and Herzegovina, Germany, Montenegro, Italy and Romania. In 2010, Germany was the most important Serbian economic partner, ahead of Russia and Italy, with an export volume of 1.2 billion euros and an import volume of almost 600 million euros. In 2009, 53.6% of Serbia's exports, approx. 3.2 billion out of 5.96 billion euros, are to the EU and 55% of Serbia's imports, approx. 6.1 billion out of 11.16 billion euros, came from the union.

Economic cooperation

Serbia is a member of the Black Sea Economic Cooperation and the Central European Free Trade Agreement (CEFTA) . There is also an agreement on special relations with the Republika Srpska .

Serbia is the only European country outside of the CIS that has a free trade agreement with Russia . The free trade agreement concluded in August 2000 between Russia and the Federal Republic of Yugoslavia, which continues to apply to Serbia as legal successor, has liberalized bilateral trade for around 95% of goods. In April 2009 an additional protocol was signed in Belgrade which reduced the list of goods that are exempt from duty-free movement. Cars, household appliances, wooden furniture, floor coverings, soap, alcoholic beverages, confectionery products, sugar and chicken are still excluded.

On December 7, 2009, the EU approved an economic agreement with Serbia, which the Netherlands had prevented so far.

Several other free trade agreements with the states of Kazakhstan , Belarus and Turkey as well as the European Free Trade Association (EFTA) are currently in force. This means that markets with a total of around 800 million inhabitants are open to the Serbian economy under largely liberalized conditions.

The free trade agreement with Turkey is an asymmetrical agreement for the benefit of the Serbian side, according to which, since 2010, Serbian products can be exported to Turkey duty-free, while the customs for Turkish goods from the fields of agriculture, textiles, black and white and non-ferrous metal will be phased out by 2015.

In mid-December 2008, the then President of Serbia, Boris Tadić , and Günther Oettinger , Prime Minister of the State of Baden-Württemberg, signed a declaration of cooperation in Stuttgart. A joint commission was thus formed to promote cooperation in the areas of business, transport, infrastructure, science, education, culture, the police and local authorities.

currency

Serbian dinars - banknotes and coins, 2005

The currency reserve of Serbia in 2007 was 9.6 billion euros.

The foreign debt of Serbia doubled within 10 years to around € 23 billion in 2010. The total debt amounts to 75% of the gross national product. Foreign exchange reserves at the end of October 2008 totaled € 10.051 billion.

A large part of the foreign currency flowing into Serbia for decades comes from the Serbs living abroad. a. Income from the tourism industry, small and occasionally large investments in their own country in various projects or as support for their families. In 2009 these amounted to approximately 5.5 billion dollars.

Taxes

Serbia is one of the countries that have a single tax. Income tax is levied in two stages: during the year, the individual types of income are taxed separately, e.g. B. Income tax 12%, income from renting and leasing 20%. At the end of the year, the total amount of income (= income) is determined. The income is taxed again with a flat tax rate of 10%, provided that it exceeds a fixed tax exemption (currently 300,000 dinars).

Corporate income tax is also a flat rate of 10 percent.

Economic sectors

Primary sector

About 65% of the total area of ​​Serbia is agricultural. The most fertile region and thus the center of agriculture is the Pannonian Plain in the north of the country in the province of Vojvodina . The agricultural economy made in 2010 about 12.6% of Serbia's gross domestic product and employed 2009 about 23.9% of the population of working age. Due to the favorable climate, there are good to very good conditions for agriculture in Serbia. The most fertile region is the Pannonian Plain in the north of the country in the province of Vojvodina. The main crops are sugar beet , corn , potatoes , wheat and fruit (especially plums , raspberries and apples ). Serbia is one of the world's largest raspberry exporters. In addition, animals are also kept (including pigs and cattle , sheep in the southwest ). The wine-growing also plays a major role, especially in the wine region Fruska Gora .

Secondary sector

South Stream through Serbia

The country's industrial sector has been growing steadily for several years. Most of the companies in Serbia were state-owned companies. In 1997, the first privatization of these companies began in order to make Serbia more attractive for investments. The share of the secondary sector in Serbia's economic output in 2010 was 21.9%. The industrial sector in Serbia is characterized by a large number of small and medium-sized companies. The most important branches of the economy are the manufacturing and construction industries. With the takeover of 67% of the Serbian car manufacturer Zastava by Fiat, the state, which is withdrawing from the industry, expects a revival of the automotive industry and a domino effect on existing obstacles, especially for companies based in the EU, for investments in Serbia. According to its own statements, Fiat plans to invest over one billion euros in the new Fiat Srbija .

The main production is food , textile products , metal products , glass , cement , machines (weapons) and occasionally technology and telecommunications products .

With the signing of the agreement in Moscow in January 2008 for the construction of the South Stream gas pipeline, which is to run around 400 km through Serbia, the takeover of 51% of the share capital of the Serbian oil company NIS (Нафтна Индустрија Србије / Naftna industrija Srbije ) by Gazprom Neft , the majority owner of which is the Russian energy company Gazprom , and the commissioning of a natural gas depot with at least 300 million cubic meters of storage capacity in the exhausted Banatski Dvor gas field around 60 kilometers northeast of the city of Novi Sad , one of the most important transit hubs for gas in Southeastern Europe will be built in Serbia in the near future. It is by far one of the largest economic projects in Serbia since the railway was built in the 19th century.

Tertiary sector

Serbia's largest lake, Lake Đerdap , is a reservoir at the Iron Gate

The service sector has dominated the economy in Serbia since 2001 and accounts for well over half of the gross domestic product (65.5% of Serbia's economic output in 2010). It is the fastest developing area of ​​the Serbian economy. The shift from the primary and declining secondary sector, which mostly consisted of state-owned enterprises, to the service sector began with a series of fundamental reforms that were introduced as early as the post-socialist era of the Milošević regime. Since then, the economy has “boomed” in this area.

The largest service center is the financial metropolis and capital Belgrade , where most of the companies from the tertiary sector are based. The other large cities of Novi Sad and Niš are also important service locations. The banks , the insurance industry, trade and transport are at the fore here.

tourism

After the break-up of Yugoslavia, tourists were largely absent due to the civil war of 1991–1995. While in 1987 4.5 million tourists visited the Yugoslav republic of Serbia, in 2005 there were only a little more than 400,000 foreign tourists. The number of foreign visitors rose to 700,000 in 2007 as a result of increased investments in tourism, the infrastructure and more advertising. Tourism income in 2008 was approximately $ 944 million. In 2009, it is estimated at $ 850 million.

The main tourist destinations in Serbia are the major cities of Belgrade and Novi Sad , numerous health resorts, the Kopaonik , Zlatibor and the Danube. Furthermore, Serbia offers numerous fortresses and monasteries as well as a multitude of lakes and gorges, of which the Iron Gate is the largest. Many of these geographic features are protected as national parks or nature reserves.

State budget

The state budget for 2011, approved on December 29, 2010, includes expenditure of RSD 844.9 billion and planned income of RSD 724.4 billion. This results in a budget deficit of 4.1% of GDP .
The national debt in 2011 was € 13.23 billion or 38.3% of GDP.

The largest expenditure items in the 2011 budget:

• Social expenses: RSD 274.3 billion - 21.8%
• Pensions: RSD 230.9 billion - 18.6%
• Public service salaries: RSD 156.7 billion - 12.4%

Economic indicators

The key economic indicators (excluding Kosovo), gross domestic product, inflation, unemployment and foreign trade, have developed as follows in recent years:

The gross domestic product of Serbia (as the Republic of Yugoslavia ) fell by half from 1990 to 2001 because of the collapsing domestic market due to the dissolution of Yugoslavia, because of the sanctions in connection with the Yugoslav wars and because of the NATO attacks during the Kosovo war of 1999.

Development of gross domestic product (GDP), real and nominal
year	1999	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010
Absolute in US $ billion (nominal)	k. A.	8.66	11.43	15.1	19.67	23.71	25.23	29.33	39.39	48.83	41.65	38.71
per inhabitant in thousand US $ (nominal)	1,444	1,152	1,523	2.013	≈ 2,630	≈ 3,177	≈ 3,391	≈ 3.958	≈ 5,336	≈ 6,616	≈ 5,642	≈ 5,233
Absolutely in billion US $ according to PPP	k. A.	42.85	46.26	48.83	51.09	56.85	61.87	67.22	73.97	79.76	77.97	80.10
per inhabitant in thousand US $ according to PPP	k. A.	5,700	6.165	6,511	≈ 6,830	≈ 7,617	≈ 8,315	≈ 9,069	≈ 10,021	≈ 10,805	≈ 10,563	≈ 10,830
Real change in% yoy	−11.2	5.3	5.6	3.9	2.4	8.3	5.6	5.2	6.9	5.5	−3.1	1.8
Source: IMF					≈ estimated

Development of the inflation rate
year	1999	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010
Inflation rate in%	41.1	70.0	80.6	8.9	2.9	10.6	17.3	12.7	6.5	12.4	8.1	6.2
Source: World Economic Outlook Database, April 2011

unemployment
in% of the working population (employees and unemployed)
year	1999	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010
Unemployment in%	13.3	12.1	12.2	13.3	14.6	19.5	21.8	21.6	18.8	14.7	17.4	19.4
Source: World Economic Outlook Database, April 2011

Export and import
in € million
year	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010
export	1,681	1,922	2,870	2,441	2,831	3,608	5.102	6,432	7,428	5,961	7,393
import	3,618	4,759	5,956	6,586	8,623	8,439	10,463	13,507	15,580	11,504	12,622
balance	−1,937	−2,837	−3,755	−4,144	−5.791	−4,831	−5,361	−7.075	−8.066	−5,543	−5.229
Source: Statistical Office of Serbia

Main trading partner (2010)
Export (in%) to		Import (in%) of
Italy	11.4	Russia	12.9
Bosnia and Herzegovina	11.1	Germany	10.6
Germany	10.3	Italy	8.6
Montenegro	8.2	People's Republic of China	7.2
Romania	6.6	Hungary	4.8
other countries	23.4	other countries	23.9
all EU countries together	57.3	all EU countries together	56
Source: Statistical Office of Serbia

Individual evidence

1. ↑ Exchange rate of the Serbian dinar.Retrieved on May 23, 2011
2. ↑ ^{a b c} Data from the International Monetary Fund: World Economic Outlook Database , as of October 2014. Accessed November 26, 2014.
3. ↑ ^{a b} http://www.blic.rs/Vesti/Ekonomija/560420/STATISTIKA-Stopa-nezaposlenosti-u-Srbiji-manja-za-tri-odsto
4. ↑ Pad BDP-a u četvrtom kvartalu 2014. godine 1,6 odsto ( Memento from June 13, 2015 in the Internet Archive )
5. ↑ ^{a b c d e} IHK Munich, series: New markets: Serbia - On the way to the EU . (No longer available online.) Archived from the original on March 2, 2011 ; Retrieved April 2, 2011 . 
6. ↑ ^{a b c} KfW country information: Serbia as of July 2012. (No longer available online.) Archived from the original on July 19, 2011 ; Retrieved January 5, 2013 .  ; As of May 2010
7. ↑ IMF. Retrieved April 2, 2011 . 
8. ↑ N-TV: A country on the move - Serbia's economy is on the right track. Retrieved April 2, 2011 . 
9. ↑ AHK country table - The economy of Serbia (PDF; 491 kB)
10. ^ IHK: Business opportunities in Serbia. Retrieved April 2, 2011 . 
11. ↑ ^{a b c} IHK Ulm: Serbia: Use the opportunities now. (No longer available online.) Archived from the original on July 19, 2011 ; Retrieved April 2, 2011 . 
12. ↑ Wirtschaftsblatt: OTE wants to get rid of Telekom Srbija shares. Archived from the original on January 31, 2011 ; Retrieved April 2, 2011 . 
13. ↑ Kurir: SRPSKA Javna PREDUZEĆA PREŽIVELA. (No longer available online.) Archived from the original on December 30, 2011 ; Retrieved May 20, 2011 . 
14. ↑ PricewatherhouseCoopers: EU compact news from Central and Eastern Europe PricewaterhouseCoopers. 17th edition, October 2005 (PDF; 73 kB) Accessed April 2, 2011 . 
15. ↑ ^{a b} IHK: Serbia: On the way to Europe ( Memento from July 19, 2011 in the Internet Archive )
16. ↑ Austrian Chamber of Commerce: Serbia improves in risk classification by the OECD. (No longer available online.) Archived from the original on May 15, 2011 ; Retrieved April 2, 2011 . 
17. ↑ Wirtschaftsblatt: "Serbia is one of the most stable banking markets". Archived from the original on July 6, 2011 ; Retrieved April 2, 2011 . 
18. ↑ Eastern Committee of the German Economy - Serbia - Economic Development. Retrieved August 7, 2011 . 
19. ↑ ^{a b c} World Economic Outlook Database, April 2011. Retrieved June 14, 2011 . 
20. ↑ Radio Srbija: Better standard of living for the socially needy. (No longer available online.) Archived from the original on May 20, 2011 ; Retrieved April 2, 2011 . 
21. ↑ Matkovic, G .; Mijatovic, B. and Petrovic, M. (2010) Impact of the financial crisis on the labor market and living conditions outcomes. Belgrade: Center for Liberal-Democratic Studies - page 8
22. ↑ ^{a b c d} CIA World Fact Book
23. ↑ ^{a b c} Embassy of the Federal Republic of Germany Belgrade. (No longer available online.) Archived from the original on July 18, 2011 ; Retrieved April 2, 2011 . 
24. ↑ How many people are poor in Serbia? ( Memento of December 16, 2011 in the Internet Archive ) Retrieved on August 5, 2011.
25. ↑ Euroactiv - Statistics: Poverty in Europe, accessed on August 5, 2011.
26. ↑ ^{a b} B92 Online : Dosije Srbija October 1, 2008
27. ↑ Germany Trade & Invest: Serbia and Russia continue to liberalize bilateral trade ( Memento from July 19, 2011 in the Internet Archive )
28. ↑ Belgrade: Market Potential
29. ↑ Germany Trade & Invest: Serbia - Free Trade Agreement with Kazakhstan ( Memento from July 19, 2011 in the Internet Archive )
30. ^ SECO: Free Trade Agreement
31. ↑ Glassrbije: Serbia and Belarus signed free trade agreements ( Memento from May 20, 2011 in the Internet Archive )
32. ↑ Germany Trade & Invest: Serbia concludes another free trade agreement ( Memento from July 19, 2011 in the Internet Archive )
33. ↑ Austrian Chamber of Commerce: As of January 1 , 2010 asymmetrical free trade ( Memento from May 15, 2011 in the Internet Archive )
34. ↑ http://www.srbija.gov.rs/vesti/vest.php?id=84346
35. ↑ http://www.blic.rs/Vesti/Ekonomija/184656/Srbija-blizu-zone--visokozaduzenih-drzava Debt of Serbia
36. ↑ U toku 2009. godine priliv od dijaspore 5.5 milijardi dolara . 
37. ↑ European Commission: Agricultural and Rural Development Country Profile Serbia (PDF; 65 kB)
38. ↑ ^{a b} Coface Country Report Serbia July 2009 ( Memento from July 19, 2011 in the Internet Archive )
39. ^ Fiat takes over Serbian Zastava , Die Presse. September 29, 2008. 
40. ^ RIA Novosti report on transit nodes
41. ↑ Wirtschaftsblatt.at on the construction of South Stream and the purchase of NIS ( Memento from July 6, 2011 in the Internet Archive )
42. ^ RIA Novosti - Putin's influence on the course
43. ↑ http://www.srbija.gov.rs/vesti/vest.php?id=85542
44. ↑ http://www.srbija.gov.rs/vesti/vest.php?id=144890 Government website of Serbia
45. ↑ Blic.rs from June 14, 2011 ( Memento from June 17, 2011 in the Internet Archive )
46. ^ World Economic Outlook Database, April 2011
47. ^ World Economic Outlook Database, April 2011
48. ↑ IMF
49. ↑ IMF
50. ↑ Statistical Office of Serbia ( Memento from November 13, 2010 in the Internet Archive ) ( ZIP ; 34.9 MB)