Key developments and challenges

Serbia has made welcome progress in EU approximation over the past year, with the unblocking by the EU of the Interim Trade Agreement. Further progress in aligning laws to EU standards will bring additional benefits once the country becomes a candidate for membership.

Large-scale privatisation has slowed, but steps have been taken recently to reinvigorate the process, notably in the telecommunications and aviation sectors. A successful outcome would be a positive signal of Serbia’s commitment to completing the privatisation process.

Within the framework of the International Monetary Fund (IMF) stand-by arrangement (SBA), the government has committed to undertake a large-scale public sector reform, including spending and employment cuts and reform of the pension system. These measures are necessary to ensure the macroeconomic conditions for sustainable growth remain in place.