Economy Overview

Economy Overview

Serbia's GDP increased by 0.8% in 2015 while GDP growth for 2016 is projected at 1.6%. Industrial output in 2015 increased by 8.2 % mainly due to the effects of the rise in electric power production and oil & gas supplies. The agriculture industry, an important sector of the Serbian economy posted 1.5 % annual growth. The amendments to the Labor Law should help boost domestic and foreign investment, employment and reduce grey economy.

On 14 December 2015 Serbia opened the first two Chapters in accession negotiations with the European Union thereby officially beginning the process of alignment of local standards and the norms as per legislation in the European Community. Following the second Intergovernmental Conference of EU and Serbia in Brussels, Chapter 32 (financial control) and Chapter 35 (Neighboring policy) were opened. Chapter 35 among other things is dealing with the issue of Kosovo.

A delegation of the International Monetary Fund (IMF) visited Serbia to conduct the third review of Serbia's Stand-by Arrangement worth EUR 1.2 billion signed with the IMF in November 2014. The meetings focused on public finances for 2016, restructuring of public enterprises and the process of privatization of state owned companies. The IMF acknowledged Serbia's improved economic outlook, higher exports, increase in domestic demand, low prices of oil and stronger-than-expected private sector wages. The IMF delegates expressed satisfaction with the Serbian government's budgetary savings and a deficit of 3.5 % in 2015. The IMF laid special focus on the upcoming process of restructuring of the Electric Power Industry of Serbia (EPS), Serbian Gas, Serbian Railways and the privatization of the remaining state-owned companies.

The 'FitchRatings' agency improved Serbia's credit rating for long-term loans in local and foreign currency from "stable" to "positive", and confirmed Serbia's B+ credit rating. According to assessment of Fitch, the improved ratings are a result of faster economic growth than expected, consistent implementation of fiscal consolidation measures and reduction of foreign trade imbalances. Fitch had projected 0.7% GDP growth in 2015 and has forecast 1.7% in 2016. The Agency also outlined potential risks regarding structural reforms, primarily in the public sector.

In its 2015 report, global credit rating agency Dun & Bradstreet (D&B) retained Serbia's rating at DB5 while mentioning that increase in the number of migrants and the possibility of Serbia having to permanently accommodate a large number of refugees could increase economic and political risks in the country.

In the latest World Bank Doing Business report, Serbia has made significant progress by moving up 32 places and seizing the 59th place on the global list. According to the report, Serbia has improved business conditions for small and medium sizes companies, reduced expenses for construction licenses and introduced electronic tax collection.

Key Economic Indicators of Serbia:

GDP in Serbia : USD 45.2 billion (Year 2015)
GDP in Serbia : USD 44.1 billion (Year 2014)
GDP per capita : USD 6,345 (Year 2015)
GDP per capita : USD 6,190 (Year 2014)
External Trade : USD 31.6 billion (Jan-Dec 2015)
Exports : USD 13.4 billion (Jan-Dec 2015)
Imports : USD 18.2 billion (Jan-Nov 2015)
GDP Growth rate : 0.8 % (Year 2015)
Exp. GDP growth : 1.6 % (Year 2016)
Inflation rate : 1.5 % (Year 2015)
Forex Reserves : USD 13.1 billion
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