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 27 February 2018


Serbia's policy response to the coronavirus crisis

The EBRD is monitoring Serbia's policy response to the coronavirus pandemic. Our biweekly publication identifies the major channels of disruption as well as selected impact and response indicators.

Learn more

Current EBRD forecast for Serbia’s Real GDP Growth in 2021: 6.5%

Current EBRD forecast for Serbia’s Real GDP Growth in 2022: 4.3%

After a mild contraction in 2020, the economy in Serbia is growing strongly in 2021. GDP grew by 13.7 per cent year-on-year in the second quarter, largely reflecting the low base of the same quarter last year. All main sectors of the economy are growing with the exception of agriculture, which remains weak since the beginning of the year. The strong expansion of exports and industry reflects the rebound of the Euro Area, Serbia’s main trading partner. Robust household consumption growth has followed a period of pent-up demand. Short-term indicators on domestic and external demand in the third quarter point to continued recovery despite the, likely temporary, slowdown in industrial production during the summer period. On the back of the base effect of the last year, rising prices of agricultural products and energy and supply chain bottlenecks, inflation increased to 5.7 per cent year-on-year in September 2021, outside the central bank’s target band of 3 per cent +/- 1.5 per cent.
Monetary policy has remained accommodative with the central bank’s main policy rate at an all-time low of 1 per cent. Following issuance of two government bonds on external markets in 2020, Serbia has placed another three Eurobonds so far in 2021 for a total amount of €2.75 billion. These include the first ever seven-year green bond at a record low coupon rate of 1.0 per cent, and a 15-year Eurobond, the longest maturity Serbia has issued so far. On the back of continuous access to external markets and an increase in the SDR allocation by the IMF, the international reserves of the National Bank of Serbia increased by 16 per cent versus end-2020 to a record level of €15.6 billion.
Foreign direct investment recovered in the first half of 2021 nearly to the 2019 level and, with almost 50 per cent of it equity, will facilitate future growth. Near-term economic prospects are positive, though uncertain given the nature of the pandemic, slow speed of vaccinations and dependence on external markets. The Serbian economy is forecast to grow by 6.5 per cent in 2021 and by 4.3 per cent in 2022.

Serbia in the EBRD’s 2021-22 Transition Report

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