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flag Serbia Serbia: Economic and Political Outline

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

 

Economic Indicators

After several years of economic euphoria, Serbia was hit by the crisis at the end of 2008. Since then, private consumption and investment have regressed. The shy recovery observed since 2010 is essentially driven by foreign demand. The economic model developed by the Serbian authorities now favors exports, considering the country's assets: its geographic location and the quality of its workforce.

The contraction of the Serbian GDP and then its low rate is mostly due to a sharp fall and then weakness in domestic demand. This drop in consumption is due to a reduction of buying power (which can be explained by the stagnation of wages and the real depreciation of the dinar) as well as an increase in unemployment. The unemployment rate, at 24.1% in 2013, is one of the highest in Europe.

The country again recorded a moderate growth since 2010, thanks in particular to the resumption of exports. In 2011 growth reached 1.6% then decreased to -1.7% in 2012. In 2013 Serbia renewed with growth with 1.6% and the 2014 forecast is 2%. Today, the living standard of the Serbian population only represents around 40% of the average living standard in the 27 member states of the EU.

The country's authorities benefit from the support of the European Union and of international financial institutions (World Bank, EIB, EBRD), which are able to mobilize over EUR 1 billion per year in order to modernize the country's infrastructures and support business investment. Serbia has developed a form of dependency from these foreign funding programs.

In 2014,  the government's priority remains the continuation of inflation stabilization (it went from 11.1% in 2011 to 8.5% in 2013), as well as the fight against unemployment, which remains the worst of the country's economic problems.

 
Main Indicators 20112012201320142015 (e)
GDP (billions USD) 43.7738.0942.4942.6542.96
GDP (Constant Prices, Annual % Change) 1.6-1.52.5-0.51.0
GDP per Capita (USD) 6,0305,292e5e5,9245,968
General Government Balance (in % of GDP) -5.3-6.1-5.7e-7.1e-7.8
General Government Gross Debt (in % of GDP) 49.562.465.8e75.6e79.6
Inflation Rate (%) 11.17.37.7e2.33.4
Unemployment Rate (% of the Labor Force) 24.423.121.021.621.8
Current Account (billions USD) -4.00-4.68-2.78-2.59-2.18
Current Account (in % of GDP) -9.1-12.3-6.5-6.1-5.1

Source: IMF - World Economic Outlook Database , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

The primary sector represents 7.9% of the country's national revenue. Serbia has significant quantities of coal, lead, zinc, copper and gold, but the lack of investment which has affected the mining sector for several years prevents the country's economy from benefiting from this wealth.

The industry sector is in need of modernization and strong foreign investment. It has contributed 31.8% to the country's GDP in 2013.

Services make up the main sector of activity, representing 60.3% of Serbia's GDP.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 21.0 26.5 52.6
Value Added (in % of GDP) 9.0 30.3 60.7
Value Added (Annual % Change) -17.3 2.4 0.4

Source: World Bank - Last Available Data.

 
 
 
Monetary Indicators 20092010201120122013
Serbian Dinar (RSD) - Average Annual Exchange Rate For 1 USD 67.5877.7373.3387.9785.16

Source: World Bank - Last Available Data.

 
 

Learn more about Market Analyses about Serbia on Globaltrade.net, the Directory for International Trade Service Providers.

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
59.4/100
Position:
Mostly Unfree
World Rank:
95/178
Regional Rank:
37/43

Distribution of Economic freedom in the world
Source: 2014 Index of Economic freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
5.55
World Rank:
65/82

Source: The Economist - Business Environment Rankings 2014-2018

 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Serbia is gradually becoming more open to international trade. The perspective of an association agreement with the European Union and the steady growth of the direct foreign investment inflows has, however, led to an increase in the volume of foreign trade in 2013.

Serbia's main customers in 2013 have been Germany, Italy, Bosnia-Herzegovina and Romania, to whom it exports iron, steel, manufactured goods and foodstuffs (fruits and vegetables, clothing, cereals...). Exports of services are relatively low.

Russia, Germany, Italy and China are Serbia's main suppliers. Serbia buys a great variety of manufactured goods and hydrocarbons. The country depends on the economic health of its trading partners - in particular in Europe - and its products are still difficult to sell due to their lack of quality in comparison with other European products. As a result, the trade balance in 2013 was again negative.

 
Foreign Trade Indicators 20092010201120122013
Imports of Goods (million USD) 16,05616,73519,86219,01320,543
Exports of Goods (million USD) 8,3459,79511,77911,35314,614
Imports of Services (million USD) 3,4063,4763,9323,7223,972
Exports of Services (million USD) 3,4783,5234,1843,9694,499
Imports of Goods and Services (Annual % Change) -19.64.47.91.4-
Exports of Goods and Services (Annual % Change) -6.915.05.00.8-
Imports of Goods and Services (in % of GDP) 42.747.949.453.651.9
Exports of Goods and Services (in % of GDP) 26.832.934.036.940.8
Trade Balance (million USD) -7,129-6,076-7,376-7,259-5,518
Trade Balance (Including Service) (million USD) -7,098-6,069-7,153-7,082-5,092
Foreign Trade (in % of GDP) 69.680.983.390.592.7

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2013
Italy 16.3%
Germany 11.9%
Bosnia and Herzegovina 8.2%
Russia 7.3%
Montenegro 5.8%
See More Countries 50.5%
Main Suppliers
(% of Imports)
2013
Italy 11.5%
Germany 11.0%
Russia 9.3%
China 7.3%
Hungary 4.9%
See More Countries 56.0%

Source: Comtrade, Last Available Data

 
 

Main Products

- bn USD of products exported in 2013
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 13.3%
Insulated incl. enamelled or anodised wire, cable...Insulated incl. enamelled or anodised wire, cable incl. coaxial cable and other insulated electric conductors, whether or not fitted with connectors; optical fibre cables, made-up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors 3.8%
New pneumatic tyres, of rubberNew pneumatic tyres, of rubber 2.7%
Fruit and nuts, uncooked or cooked by steaming or...Fruit and nuts, uncooked or cooked by steaming or boiling in water, frozen, whether or not containing added sugar or other sweetening matter 2.2%
Panty hose, tights, stockings, socks and other...Panty hose, tights, stockings, socks and other hosiery, incl. stockings for varicose veins and footwear without applied soles, knitted or crocheted (excl. for babies) 1.9%
See More Products 76.1%
- bn USD of products imported in 2013
Parts and accessories for tractors, motor vehicles...Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles of heading 8701 to 8705, n.e.s. 8.0%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 6.4%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 4.5%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses incl. those in the form of transdermal administration or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 3.1%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 2.9%
See More Products 75.1%

Source: Comtrade, Last Available Data

 
 
 
 

Main Services

- bn USD of services exported in 2012
36.11%
27.73%
8.80%
7.00%
6.65%
6.14%
4.26%
1.39%
1.09%
0.66%
0.16%
- bn USD of services imported in 2012
33.59%
28.05%
9.48%
6.45%
5.79%
5.10%
3.85%
2.56%
1.95%
1.65%
1.53%

Source: Comtrade, Last Available Data

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Sources of General Economic Information

Ministries
Ministry of Finance
Statistical Office
Statistics Office of Serbia
Central Bank
National Bank of Serbia
Stock Exchange
Belgrade Stock Exchange
Search Engines
Google Serbia
Cruiser
Serbian Cafe
Yusearch
Economic Portals
Ekonomist
Portal for economic information about Serbia

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Political Outline

Executive Power
Executive power is held by the President of the Republic, the Prime Minister and the Council of Ministers. The President is elected for a 5 year term by direct universal suffrage, and can be elected twice. He has exceptional powers in case of a state of emergency and can dissolve the National Assembly. The government and its members, on the other hand, are accountable to the National Assembly.
Legislative Power
Legislative power is held by the National Assembly, which consists of 250 Members elected for a 4 year term by direct universal suffrage.
Main Political Parties
DS, Democratic Party (Boris TADIC)
DSS, Serbian Democratic Party (Vojislav KOSTUNICA)
G17 Plus (Mladjan DINKIC)
NS, New Serbia (Velimir ILIC)
SPO, Movement for Serbian Revival (Vuk DRASKOVIC)
SPS, Serbian Socialist Party (Ivica DACIC)
SRS, Serbian Radical Party (Tomislav NIKOLIC)
Current Political Leaders
President: Tomislav NIKOLIC (since 31 May 2012) - Serbian Progressive Party (SNS)
Prime Minister: Aleksandar VUCIC (since 22 April 2014) - Serbian Progressive Party (SNS)
Next Election Dates
Presidential: 2017
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
54/180
Evolution:
9 places up compared to 2013

Source: Worldwide Press Freedom Index 2014, Reporters Without Borders

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Free
Political Freedom:
2/7

Map of freedom 2014
Source: Freedom House

 

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Last Updates: October 2014