Serbia overview

Cityscape nearby the river

In Serbia we focus on:

Enhancing the role and competitiveness of the private sector. Serbia’s level of private sector engagement in the economy is modest even by regional standards. Small and medium sized enterprises (SMEs), which form the backbone of the Serbian private sector, face limited access to finance. The EBRD will thus work to increase private sector competitiveness, with an added focus on the agribusiness value chain. We will seek to assist SMEs in financing projects conducive to sustainable growth. Finally, we will further support pre-privatisation and privatisation alongside strategic investors.
Bolstering the banking sector and deepening the financial intermediation. While the financial sector has survived the crisis, its role as a driver of economic growth has been significantly diminished. Credit growth is weak, the share of non-performing loans is significant and the level of euroisation is high. In line with the Joint IFI Action Plan for Growth in Central and South-Eastern Europe, we will seek to help stabilise the financial sector. We will continue our policy dialogue, directly with the National Bank and through the Vienna Initiative 2.0, to encourage local currency lending and improve cross-border cooperation on banking sector issues and help in resolving the problem of NPLs.
Developing sustainable and efficient public utilities. Large transition gaps remain in the energy and infrastructure sectors. Other transition challenges include: adjusting tariffs to cost recovery levels, strengthening the regulators’ capacity, commercialising and restructuring public enterprises, and increasing private sector participation. The EBRD will focus its efforts on accelerating the implementation of its already financed projects and, given the limited fiscal space, will carefully select new investments. In the energy sector in particular, we will aim to continue to play a key role in promoting energy efficiency and renewable energy, while assisting with replacing the aging electricity generation capacity and bringing power generation into compliance with the EU environmental standards.

The EBRD latest Serbia Strategy was adopted on 11 April 2014

Current EBRD forecast for Serbia’s Real GDP Growth in 2017 2.9%

Current EBRD forecast for Serbia’s Real GDP Growth in 2018 3.0%

After a strong momentum (2.9 per cent year-on-year) in the first half of 2016, the Serbian economy is expected to grow by 2.5 per cent in 2016 and by 2.7 per cent in 2017. Private investments will continue to be the main growth driver, supported by the recovery of consumption, partially offset by declining contribution from net exports. The main upside risk for the projection comes from the potential upscaling of production in the recently privatised large steel mill where the Chinese owner announced ambitious investment and production plans while future oil price developments and possible weak external demand, in particular for the automobile sector, may be a drag on growth next year. Medium-term prospects are favourable, but will depend on the pace of reforms envisaged in the IMF programme, further improving the investment climate, supporting NPL resolution and corporate restructuring to unlock credit growth, and accelerating the implementation of major infrastructure projects.

Serbia in the EBRD’s 2015-16 Transition Report

Serbia in the latest BEEPS survey