7344847
Serbian (official) 88.1%, Hungarian 3.4%, Bosnian 1.9%, Romani 1.4%, other 3.4%, undeclared or unknown 1.8%
BELGRADE (capital) 1.182 million (2015)
- Conventional long form
- Republic of Serbia
- Conventional short form
- Serbia
- Local long form
- Republika Srbija
- Local short form
- Srbija
parliamentary republic
- Name
- Belgrade
- Geographic coordinates
- 44 50 N, 20 30 E
- Time difference
- UTC+1 (6 hours ahead of Washington, DC, during Standard Time)
- Daylight saving time
- +1hr, begins last Sunday in March; ends last Sunday in October
has not submitted an ICJ jurisdiction declaration; accepts ICCt jurisdiction
Serbia has a transitional economy largely dominated by market forces, but the state sector remains significant in certain areas. The economy relies on manufacturing and exports, driven largely by foreign investment. MILOSEVIC-era mismanagement of the economy, an extended period of international economic sanctions, civil war, and the damage to Yugoslavia's infrastructure and industry during the NATO airstrikes in 1999 left the economy worse off than it was in 1990. In 2015, Serbia’s GDP was 27.5% below where it was in 1989.
- Inflation
- 1.122%
- External debt stocks
- US$ 30,807,456,000
- Total tax rate (% of commercial profits)
- 39.7%
- Real Interest Rate
- 11.783%
- Manufacturing, value added (% of GDP)
- 19.1%
- Current Account Balance
- US$ -1,751,130,467
- Labor Force, Total
- 3,027,318
- Employment in Agriculture
- 19.41%
- Employment in Industry
- 24.46%
- Employment in Services
- 56.13%
- Unemployment Rate
- 16.53%
- Imports of goods and services
- US$ 21,984,859,527
- Exports of goods and services
- US$ 19,217,823,126
- Total Merchandise Trade
- 90.29%
- FDI, net inflows
- US$ 2,345,152,815
- Commercial Service Exports
- US$ 4,730,351,267
wheat, maize, sunflower, sugar beets, grapes/wine, fruits (raspberries, apples, sour cherries), vegetables (tomatoes, peppers, potatoes), beef, pork, and meat products, milk and dairy products
automobiles, base metals, furniture, food processing, machinery, chemicals, sugar, tires, clothes, pharmaceuticals
- Commodities
- automobiles, iron and steel, rubber, clothes, wheat, fruit and vegetables, nonferrous metals, electric appliances, metal products, weapons and ammunition
- Partners
- Italy 16.2%, Germany 12.6%, Bosnia and Herzegovina 8.7%, Romania 5.6%, Russia 5.4% (2015)
- Commodities
- machinery and transport equipment, fuels and lubricants, manufactured goods, chemicals, food and live animals, raw materials
- Partners
- Germany 12.4%, Italy 10.6%, Russia 9.6%, China 8.5%, Hungary 4.8%, Poland 4.2% (2015)
- Country Risk Rating
- B
- Political and economic uncertainties and an occasionally difficult business environment can affect corporate payment behavior. Corporate default probability is appreciable.
- Business Climate Rating
- B
- The business environment is mediocre. The availability and the reliability of corporate financial information vary widely. Debt collection can sometimes be difficult. The institutional framework has a few troublesome weaknesses. Intercompany transactions run appreciable risks in the unstable, largely inefficient environments rated B.
- Public sector reform in coordination with the IMF and EU
- Under the process of gaining membership into the European Union
- Presence of deposits of mineral raw materials (coal, copper, lead…)
- Modern automotive industry
- Remittances from expatriate workers
- Weak public finances
- Inefficient public sector
- Lack of transport infrastructure isolating the country
- Lack of productivity in the extractive and manufacturing industries (excluding automotive)
- Strong euroisation of credit (70%)
- Declining population
After nearly seven years of weak or negative growth, in 2016 growth returned to its pre-crisis level. 2017 is expected to strengthen this recovery, thanks, notably, to the continued buoyancy of foreign investments in industry and infrastructure, as well as resurgent public investment
Household consumption is expected to revive as employment picks up, despite still high unemployment and a significant informal jobs market (almost 23% of total employment). Domestic demand will benefit from a return to growth in bank lending thanks to lower interest rates. Credit will, however, be limited by still high levels of non-performing loans, especially with public-sector banks. External trade is still expected to make a positive contribution thanks to good manufacturing export performance, especially of cars.
Despite holding parliamentary elections in 2016, the authorities continued with the fiscal restructuring begun in 2015 under agreement concluded with the IMF in February 2015 for three years. The deficit is expected to narrow further in 2017. Income will benefit from growth, while the decline in current spending is likely to continue as civil service jobs are cut and with the implementation of pension reform. The reduction in the number of public-sector companies, often poorly managed and, therefore, costly, will also play a key role. However, the restructuring is a long way from being vested or completed. Wage moderation could come to an end and pension reform may not be fully implemented. The functioning of the administration still leaves plenty to be desired. The financing of local authorities, in deficit, needs to be reformed. The restructuring of many state-owned enterprises in transport, energy, the mining industry and manufacturing, sometimes prerequisite to privatisation, or the winding up of those in the biggest trouble, is delayed. This is critical to initiating the alleviation of the heavy burden of public debt, which could rapidly become untenable if growth declines and the dinar depreciates against the dollar and the euro (33 and 46% respectively of the outstanding debt). At an opportune time, the cost of servicing the debt has moderated because of the favourable conditions granted by international and bilateral funders, such as the United Arab Emirates in October 2016.
Trade in goods is broadly running a deficit in excess of 10% of GDP in 2016. Exports are dominated by automotives, agricultural products, metals and a large variety of medium to low value-added manufacturing products, mostly destined for the neighbouring Balkan countries. A large part of the deficit is explained by imports associated with foreign investments. The services surplus (almost 3% of GDP) and, to a greater extent, the remittances by emigrant workers (9%) offset a good part of the trade deficit. The remaining current account deficit is largely financed by foreign direct investments, both in industry (e.g. Fiat in automotive) and in transport and energy infrastructure (China, Russia). The surplus helps boost reserves, which on top of the availability of an IMF credit facility until February 2018 and a swap agreement with China, enable the country to protect itself against an exchange rate crisis which would weaken an economy with a high debt burden in euro, despite efforts to promote borrowing in dinar. External debt is in excess of 80% of GDP, of which 60% is held by the pubic sector, but it is medium term, cheap and partially linked to FDIs.
The April 2016 early elections returned Prime Minister Aleksandar Vučić and his coalition made up of the Progressive Party (SNS) and the Socialist Party to office, who now have renewed legitimacy to continue the public sector reforms until 2020. The business climate is still hampered by administrative delays, corruption and political interference. Negotiations with a view to EU accession will continue, even if the normalisation of relations with Kosovo is delayed and those with Bosnia Herzegovina are complicated by the attitude of the Bosnian Serbs.