Economic Overview

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

The economy of Serbia experienced rapid growth from 2001–2008, although the global financial crisis hit hard on the country’s economy, showing its structural weaknesses and the need for a full transition to a market economy. Despite turning into negative territory in 2020 as a consequence of the COVID-19 crisis, Serbia’s GDP rebounded strongly in 2021 (+7.4%) and continued its positive trend in 2022 when growth was estimated at 2.3% by the Statistical Office of Serbia, with domestic demand as the main source of growth. Amid ongoing weakness in export markets, the IMF forecasts a GDP increase of 2.4% for 2023, before growth revives to 3.5% in 2024 as monetary policy is eased, lower inflation reduces pressure on disposable incomes and external conditions improve.

The general government budget recorded a deficit of 3.1% of GDP in 2022 (from 4.1% one year earlier), lower than the target of 3.9% set in the revised budget adopted in November, as inflation fuelled tax revenue and contained current expenditure growth, partly balancing net lending of around 1.8% of GDP to cover losses in the energy sector. The 2023 budget projects a 3.3% deficit with total revenue of EUR 15.75 billion, 7.8% more than in the amended 2022 budget. Tax revenues are planned in the amount of EUR 13.61 billion, and non-tax revenues in the amount of EUR 1.71 billion. The public debt-to-GDP ratio stood at an estimated 54.4% in 2022 and should follow a downward trend in 2023 (50.3%) and 2024 (47.3% - IMF) thanks to continued primary surpluses. Inflation reached an 11-year high in December 2022 and averaged 11.5% over the year. Due to the expected increase in inflation in the 1st quarter of 2023, the National Bank of Serbia continued with a strong increase in the reference interest rate by 50bp to 5.0%. For the year as a whole, inflation is expected to remain high but somewhat moderate to 8.3% in 2023, with a more consistent decrease the following year (4.2% as per the IMF projections). Meanwhile, negotiations for EU membership continued: Serbia has met the criteria to open new sets of chapters in the EU accession talks (including the Green Agenda and sustainable connectivity), although the normalisation of relations with Kosovo is slow and those with Croatia and Bosnia-Herzegovina are complicated. The negotiations are expected to end in 2024. The main challenges that Serbia faces are: stagnant household incomes, a need for private-sector job creation and structural reform of public enterprises as well as strategic reforms in the public sector. An ineffective judicial system, a high level of corruption and an ageing population represent other challenges that the country will have to face in the long term.
 
Serbia's unemployment rate, relatively low compared to its neighbours in the Balkans, remains significantly higher than the European average: in 2022, it stood at 9.9%, with a marginal decrease expected in the next couple of years (9.5% in 2024 as per the IMF projections). The standard of living of the Serbian population remains significantly below the EU average and the country's informal sector is substantial. However, the authorities have the support of the EU and international financial institutions to modernise infrastructure and support investment in the business community. Eurostat estimates that the number of people at risk of poverty fell further to 29.8% in 2020 (was 39.5% five years earlier), while the GDP per capita (PPP) stood at USD 24,084 in 2022 (IMF).

Foreign Trade

Serbia is gradually becoming more open to international trade, which represents 117% of GDP (World Bank, latest data available). The Stabilisation and Association Agreement between the EU and Serbia and the steady growth of foreign direct investment inflows have led to a constant increase in the volume of foreign trade. The country’s main exports are electrical machines and apparatus (11.3%); metal ores and residues (6.9%); power engines and motors (5%); iron and steel (4.4%); and fruit and vegetables (4.2%); whereas imports are led by oil and oil derivatives (7.7%); electrical machines and apparatus (6.1%); natural gas (4.4%); electricity (4.1%); and medical and pharmaceutical products (3.9% - data Statistical Office of the Republic of Serbia, 2022).

The country's main customers are Germany (13.7%), Bosnia-Herzegovina (7.5%), Italy (7.2%), Hungary (5.4%), and Romania (4.4%). Its main suppliers are China (12.1%), Germany (7.4%), Russia (7.5%), Italy (6.6%) and Hungary (5.6% - data Statistical Office of the Republic of Serbia 2022). Serbia is the largest Western Balkan trade partner of the European Union. Observed by regions, the largest share in export of Serbia was noted in Vojvodine (33.6%), followed by Beogradski (23.3%), Šumadije and Zapadne Srbije (21.0%), and Južne and Istočne Srbije (19.9%).

Serbia has a structural trade deficit that amounted to 7.8% of GDP in 2021, according to the World Bank. A large portion of the deficit is due to investment-related imports. Exports of merchandise stood at USD 25.5 billion (+31.1% y-o-y), against USD 33.8 billion in imports (+28.8% y-o-y). In the same year, Serbia exported USD 9.2 billion worth of services, importing USD 7.5 billion (data WTO). According to figures from the Serbian statistical office, in 2022 the country's exports grew by 12.4% to USD 29 billion, while imports went up by 20.4% to USD 41.1 billion. The deficit amounted to USD 12 billion, which was an increase of 44.9% in relation to the same period one year earlier.

COVID-19 Country Response

COVID-19 epidemic evolution

To find out about the latest status of the COVID-19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in Serbia, please visit official governmental portal covid19.rs with the official data. For the reports from the Serbian Institute of Public Health, click here.
For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.

Sanitary measures

To find out about the latest public health situation in Serbia and the current sanitary measures in vigour, please consult the list of the decisions taken by the national government (in Serbian). Updates on the containment measures can be retrieved on the official governmental website.

Travel restrictions

The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.
The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.

Import & export restrictions

Serbia introduced an export ban on medicaments, as well as a ban for certain basic life products (wheat flour, sugar, oil, hygiene products, etc.).
For the information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the portal of the Serbian Customs Authority.
For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to Serbia on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

To know about the economic measures taken by the Serbian government to address the impact of the COVID-19 pandemic on the national economy, please visit the dedicated page on the website of the Ministry of Economy (in Serbian). The National Bank of Serbia introduced a 3-months moratorium on all repayments under bank loans and financial leasing agreements. An overview of the measures is available on the guide by Deloitte and on the website of AmCham Serbia.

For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Serbian government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Serbia in the IMF’s Policy Tracker platform.

Support plan for businesses

For the information on the local business support scheme and taxation measures established by the Serbian government to help businesses to deal with the economic impacts of the COVID-19 epidemic on their activity, please consult the website of the Ministry of Economy (in Serbian) and the dedicated page on the portal of the Serbian Development Agency (in Serbian). The instructions on the implementation of the regulation on fiscal benefits and direct benefits to private sector companies is available here (in Serbian). For details in English refer to the website of Wolf Theiss.
For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the World Bank's Map of SME-Support Measures in Response to COVID-19.

Support plan for exporters

The Export Insurance and Financing Agency (AOFI) granted a moratorium on all claims in order to overcome the negative effects on Serbia's export-oriented businesses due to the COVID-19 pandemic.