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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).

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 63.5075.0281.6988.9195.52
GDP (Constant Prices, Annual % Change) 2.32.03.04.54.0
GDP per Capita (USD) 9,52811,30112,35713,50214,564
General Government Balance (in % of GDP) -1.4-2.0-2.0-1.3-1.3
General Government Gross Debt (in % of GDP) 53.551.349.647.445.2
Inflation Rate (%) n/a12.45.33.53.2
Unemployment Rate (% of the Labour Force) 9.49.19.08.88.7
Current Account (billions USD) -4.35-1.76-2.64-3.15-3.59
Current Account (in % of GDP) -6.9-2.3-3.2-3.5-3.8

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

Serbia has a workforce of 3.16 million out of its 6.8 million population. The agricultural sector accounts for 6.3% of the country's GDP (its share has been decreasing in the past years), employing nearly 16% of the workforce (World Bank, latest data available). Serbia has 3.4 million hectares of agricultural land. Its continental climate with cold winters and hot humid summers is ideal for intensive fruit production. Fruit production consists mainly of apples, grapes, plums, peaches, pears and berries. Recently Serbia has been widely using fruit processing to obtain products like brandies, jams, juices, and compotes. The main crops are maize and wheat, together with barley, oat and rye. Figures from the national Statistical Office show that agricultural production volume fell by 8% in 2022 compared to one year earlier.

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 industrial sector is likewise in need of modernization and foreign investment, currently contributing one-fourth of the country's GDP and employing 27% of the workforce. The country’s main industries include automotive, food processing, chemicals, base metals, furniture, pharmaceuticals, machinery, sugar, tires and clothing. The manufacturing sector is estimated to account for 13% of GDP. According to the national statistical institute, Serbia's industrial production increased by 1.5% year-on-year in 2022, while manufacturing grew by 1.7%.

Services make up the main sector of activity and account for 51.4% of Serbia's GDP, employing 57% of the workforce. The IT industry is one of the fastest-growing, same as for the tourist sector which represented 6.9% of GDP before the pandemic. Following a decline due to the COVID-19 crisis, tourist overnight stays increased by 37.5% y-o-y in 2022. In the same year, retail trade turnover recorded grew by 6.4%, while the wholesale trade turnover increased by 19% in nominal terms (Statistical Office of the Republic of Serbia). Concerning the banking sector, foreign banks account for 86% of the market, while state-owned banks and domestic private banks account for 7% each (EBF – latest data available).

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 13.9 28.9 57.1
Value Added (in % of GDP) 6.8 23.1 52.4
Value Added (Annual % Change) -8.3 -0.7 4.5

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
Serbian Dinar (RSD) - Average Annual Exchange Rate For 1 USD 111.28107.76100.18105.20103.16

Source: World Bank - Latest available data.

 

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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.

 
Foreign Trade Values 20182019202020212022
Imports of Goods (million USD) 25,88226,73026,23333,79741,148
Exports of Goods (million USD) 19,22719,63019,49825,56429,058
Imports of Services (million USD) 5,9676,6255,8227,5539,180
Exports of Services (million USD) 7,1377,7557,0859,20711,604

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20182019202020212022
Foreign Trade (in % of GDP) 109.5112.0104.7116.8137.6
Trade Balance (million USD) -5,983-6,289-5,941-7,094-9,901
Trade Balance (Including Service) (million USD) -4,813-5,159-4,677-5,441-7,478
Imports of Goods and Services (Annual % Change) 10.810.7-3.617.717.8
Exports of Goods and Services (Annual % Change) 7.57.7-4.219.517.6
Imports of Goods and Services (in % of GDP) 59.160.956.562.374.2
Exports of Goods and Services (in % of GDP) 50.451.048.254.563.5

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20232024 (e)2025 (e)2026 (e)2027 (e)
Volume of exports of goods and services (Annual % change) 5.25.46.06.36.4
Volume of imports of goods and services (Annual % change) 1.54.25.45.95.9

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
In international trade, Serbia shows a preference for relations with the EU and the United States. Nevertheless, the Serbian government also wants to develop privileged relations with its neighbors as proved by the bilateral treaties signed with Bulgaria and Romania. A free trade agreement has been signed as well with Belarus (2009) and Russia(2001).
 

Main Partner Countries

Main Customers
(% of Exports)
2022
Germany 13.7%
Bosnia and Herzegovina 7.5%
Italy 7.2%
Hungary 5.4%
Romania 4.4%
See More Countries 61.8%
Main Suppliers
(% of Imports)
2022
China 12.1%
Germany 11.4%
Italy 6.6%
Hungary 5.6%
Türkiye 5.2%
See More Countries 59.0%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President: Aleksandar VUCIC (since 31 May 2017)
Prime Minister: Ana BRNABIC (since 29 June 2017)
Next Election Dates
Presidential: April 2027
National Assembly: April 2026
Main Political Parties
Serbia has a multi-party system. The main parties include:

- Serbian Progressive Party (SNS): centre-right, right-wing populist, led by Aleksandar Vucic and head of the Together We Can Do Everything alliance
- Socialist Party of Serbia (SPS): left-wing, nationalist, populist, led by Ivica Dacic
- United Serbia (JS): conservatist, populism
- Social Democratic Party of Serbia (SDPS): social democracy, populism
- Party of United Pensioners of Serbia (PUPS): centre left, pensioners' interests
- United (Ujedinjeni): parliamentary group composed of parties that took part in the United for the Victory of Serbia (UZPS) coalition in the 2022 general election
- National Democratic Alternative (NADA): national-conservative political coalition, led by the New Democratic Party of Serbia (NDSS) and Movement for the Restoration of the Kingdom of Serbia (POKS)
- People's Party (Narodna): centre-right
- Democratic Party (DS): centre, social liberalism, pro-Europe
- Serbian Party Oathkeepers (SSZ): far-right
- Together (Z): left-wing
- Dveri: nationalism, right-wing populism
- Do not let Belgrade drown (NDB): green
- Alliance of Vojvodina Hungarians (VMSZ): represents the Hungarian minority in Serbia.

Executive Power
Executive power is held by the Prime Minister and the cabinet (Council of Ministers). The Prime Minister and the members of the government are elected by the National Assembly. The President of the Republic has little executive power and is primarily a ceremonial position. 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.
Legislative Power
Legislative power is held by the unicameral parliament, known as the National Assembly, which consists of 250 deputies elected for a 4-year term by direct universal suffrage. Its decisions are taken by a majority vote of members at the session at which a majority of deputies are present. In the case of amendments to the Constitution, a two-thirds majority is needed.
 

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COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) undertaken by the Serbian government, please consult the section dedicated to Serbia in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

 

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