Serbia overview

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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 2015 0.5%

Current EBRD forecast for Serbia’s Real GDP Growth in 2016 1.8%

Serbia underwent three recessions in the last six years, but a modest recovery is under way in 2015. The economy contracted by 1.8 per cent in 2014, largely due to severe floods. We forecast a slow recovery of 0.5 per cent in 2015 as stronger external demand and lower oil prices may offset the short-term negative effects from the fiscal consolidation under the IMF programme. Exports will continue to be the main growth driver, supported by supply-side effects – the re-launch of operations of a major steel plant as well as normalization of coal extraction and power generation in the second half of the year after the damage caused by last year’s floods. Despite the improvement in industrial production, declining car production and a worse-than-expected agricultural season weigh on this year’s growth. Growth is anticipated to accelerate from 2016 in line with expected stronger EU growth, and a pick-up in domestic investment.

Serbia in the EBRD’s 2015-16 Transition Report

Serbia in the latest BEEPS survey

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