Economy of Serbia

Economy of Serbia
Central bank, Belgrade, Serbia.jpg
The National Bank of Serbia
Rank 74th (PPP) / 80th (nominal)
Currency Serbian dinar (RSD)
Fiscal year Calendar year
Trade organisations CEFTA, BSEC
Statistics
GDP $ 81.616 billion (2013 estimate, PPP)[1]
$42.9 billion (2013 estimate, nominal)[1]
GDP growth 2.0% (2013)[2]
GDP per capita $10,788 (2013 estimate, PPP)[1]
$5,667 (2013 estimate, nominal)[1]
GDP by sector agriculture: 12.7%
industry: 23.5%
services: 63.8% (2009)[3]
Inflation (CPI) 11.4% (April 2013)[4]
Population
below poverty line		 9.2% (2011 est.)[5]
Gini coefficient 28.2 (2009)[6]
Labour force 3.26 Million (2008)[7]
Labour force
by occupation		 agriculture: 24.1%
industry: 27.2%
services: 48.7% (2008)[7]
Unemployment 22.4% (November 2012)[8]
Average gross salary 57,628 RSD (March 2013),[9]
$681 (March 2013)[9]
Average net salary 41,689 RSD (March 2013),[9]
$493 (March 2013)[9]
Main industries base metals, furniture, food processing, machinery, chemicals, sugar, tires, clothes, pharmaceuticals
Ease of Doing Business Rank 92nd[10]
External
Exports $11.45 bn (2012)[11]
Export goods iron and steel ($1.052bn), non-ferrous metals ($0.898bn), electrical machines ($0.745bn), cereals ($0.732bn), vegetables ($0.658bn), military hardware ($0.646bn)[12]
Main export partners EU countries (54.2%), CEFTA countries (33%), CIS countries (7.3%)[13]
Imports $19.12 bn (2012)[12]
Import goods oil ($2.259bn), natural gas ($1.186bn), vehicles ($1.072bn), industrial machines ($0.850bn) electrical machines ($0.838bn)[12]
Main import partners EU countries (52.9%), CIS countries (18.5%), CEFTA countries (7.8%)[13]
FDI stock $3.02 billion (FY 2011)[14]
$31.22 billion (From 2000-2011)[5]
Gross external debt $34.71 billion (February 2013)[15]
Public finances
Public debt $17.29 bn (February 2013)[16]
Revenues $11.0 bn (2013 budget)[17]
Expenses $12.5 bn (2013 budget)[17]
Credit rating Standard & Poor's:[18]
BB (Domestic)
BB (Foreign)
BB (T&C Assessment)
Outlook: Stable[19]
Fitch:[19]
BB-
Outlook: Stable
Dun & Bradstreet:[20]
DB4d
Foreign reserves $16.20 billion (December 2012)[21]

Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars

Serbia's economy is based mostly on various services (63.8% of GDP),[3]industry (23.5% of GDP),[3] and agriculture (12.7% of GDP).[3] In the late 1980s, at the beginning of the process of economic transition from a planned economy to a market economy, Serbia's economy had a favorable position, but it was gravely impacted by economic sanctions from 1992–1995, as well as excessive damage to infrastructure and industry during the 1999 NATO bombing.[22]

After the ousting of former Yugoslav President Slobodan Milošević in October 2000, the country went through an economic liberalization process, and experienced fast economic growth. GDP per capital (nominal) went from $1,160 in 2000 to $6,917 in 2008.[23] Furthermore, it has been made a candidate for the European Union in March 2012. The European Union is Serbia's most important trading partner. Estimated GDP (nominal) of Serbia for 2013 is $42.9 billion,[23] which is $5,667 per capita.[23] Estimated GDP (PPP) of Serbia for 2013 is Intl. $81.6 billion,[23] which is Intl. $10,788 per capita.[23] In 2011 the economy grew at 3.7% (Q1 2011) 2.5% (Q2 2011) 0.5% (Q3 2011) 0.8% (Q4 2011),resulting in nearly 2% GDP growth for 2011.[2] Serbia entered a second recession in 2012, causing GDP to decline 1.6% for that year. However, during the first quarter of 2013 growth in industrial production and exports resulted in a 2.0% increase in GDP.[24] At present, main economic problems are high unemployment rate (22.4%, November 2012)[25] and a large trade deficit ($7.2 billion, 2009).[26]

In recent years, Serbia has seen an increasingly swift foreign direct investment trend, including auto industry Fiat, metal processing industry US Steel, building material industry Lafarge, food and beverages industry Carlsberg, Coca Cola, Nestle, textile industry Golden Lady, Pompea, leather industry Progetti Company, Falc East, ICT Industry Microsoft and Siemens.[27] By countries, most cash investments in 2000-2012 period came from Austria ($2.68bn),[28]Greece ($1.62bn),[29]Norway ($1.55bn),[29]Germany ($1.30bn),[29] and Italy ($0.95bn),[29] while major investor countries also include Slovenia,[29]Netherlands,[29]Russia[29] and France.[29] The actual amount of investments from countries such as the United States and Israel are significantly higher than the official figure due to their companies investing primarily through European affiliates.[29]

Macroeconomic trends

The average growth of Serbia's GDP in the last ten years were 4.45% per year.[30] GDP structure by sector in 2009 was: services 63.8%, industry 23.5%, agriculture 12.7%.[3] GDP structure by components in 2008 was: private consumption 74.3%, public consumption 20.6%, investments 28.6%, exports 30,7%, imports 54,2%.[31]

GDP
Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
GDP (USD Billions) 8.7 11.4 15.1 19.5 23.7 25.2 29.3 42.9 47.7 43.6 36.7 43.3 37.2 42.9
GDP growth rate 5.3% 5.6% 3.9% 2.4% 9.3% 5.4% 5.2% 6.9% 5.5% -3.0% 2.0% 1.6% -1.7% 3.0%
GDP Per Capita (USD) 1152 1524 2012 2613 3169 3391 3958 5304 6485 5497 4891 5725 4943 5667
GDP (PPP) per capita (Geary-Khamis $) 5655 6100 6468 6786 7598 8315 8928 9722 10360 10125 10120 10404 10404 10788
Source: IMF [23]

Serbia's primary industries include processing of base metals, furniture, food processing, machinery, chemicals, sugar, tires, clothes and pharmaceuticals.[3] The main export products of Serbia in 2009 were: iron and steel ($0.64bn), clothes ($0.53bn), cereals ($0.47bn), vegetables ($0.45bn), non-ferrous metals ($0.44bn).[26] The main Serbian agriculture products are wheat, maize, sugar beets, sunflower, raspberries, beef, pork and milk.[3] The average growth of Serbian industry total from 2000 to 2008 were 3.07% per year.[32] Economic worries are said for the first time in years to trump tensions over Kosovo and relations with the West among voter concerns when Serbians head to the polls in presidential, parliamentary and local elections on Sunday, 6 May 2012.[33]

Industrial production growth rate
Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Mining and quarrying 8.1 -12.8 1.6 0.8 -0.7 2.1 3.5 -0.6 3.6 -3.8 5.8 10.4
Manufacturing 14.5 0.7 2.7 -4.6 9.6 -0.7 5.4 4.3 0.8 -16.1 4 -0.4
Electricity, gas and water supply 2.1 1,2 -1.7 2,3 0.1 6.6 2.2 2.8 1.8 0.8 -4.4 9.7
Industry total 11.4 0.1 1.8 -3.0 7.1 0.8 4.7 3.7 1.1 -12.6 2.5 2.1
Source 1: Development Bureau of Serbia
Source 2: Statistical Office of Serbia
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Public finances

The Serbian Ministry of Finance performs tasks related to the state budget, public revenue, public spending and public debt in the country. Serbia's public debt relative to GDP from 2000 to 2008 decreased by 144.6 percentage points, and then started increasing again as the government was fighting effects of world-wide 2008 financial crisis.

Public debt (year-end)
Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Debt (Billions EUR) 14.17 13.43 11.53 11.02 9.68 10.28 9.35 8,88 8.78 9.85 12.16 14.48
Debt (Percent of GDP) 169.3% 105.2% 72.9% 66.9% 53.3% 52.2% 37.7% 30.9% 29.2% 34.8% 42.9% 44.8%
Source: Ministry of Finance of Serbia

The National Bank of Serbia is the central bank of Serbia and as such its main responsibilities are the protection of price stability, the dinar exchange rate policy, management of the foreign currency reserves and maintenance of efficient payment and financial systems. Serbian foreign exchange reserves were highly augmented from 2000 to 2007, when they amounted 16.07 bn USD. After that they started to decrease, and in 2008 they amounted 12.85 bn USD. As of September 2012, Serbia's budget deficit is 7.1 per cent and the public debt is almost 55 per cent of GDP.[34]

Foreign exchange reserves (year-end)
Year 2000 2001 2002 2003 2004 2005 2006 2007 2008
National bank (bn USD) 0.52 1,17 2,28 3.55 4.24 5.84 11.89 14.22 11.48
Domestic banks (bn USD) 0.37 0.64 0.78 0.89 0.91 0.70 0.75 1.85 1.37
Total (bn USD) 0.89 1.81 3.06 4.44 5.15 6.54 12.64 16.07 12.85
Source: National Bank of Serbia
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External trade

Serbian exports in 2009
Serbian imports in 2009
Graphical depiction of Serbia's product exports in 28 color-coded categories.

Serbia signed Free Trade Agreement (FTA) with the EU enabling exports of all products originating from Serbia without customs and other fees.[35] For a limited number of products (baby beef, sugar, and wine), annual import quotas remain in effect. In 2009, the EU countries was the largest export partners (54.2%) and the largest import partners (52.9%) of Serbia.[26]

Serbia signed the CEFTA enabling exports of all products originating from Serbia without customs and other fees in the region: Albania, Bosnia and Herzegovina, Croatia, Macedonia, Moldova, Montenegro and UNMIK-Kosovo.[35] In 2009, the CEFTA countries were the second largest export destinations (33%) and third largest import destinations (7.8%) of Serbia.[26]

Serbia signed a FTA with Russia.[35] For a limited number of products, annual import quotas remain in effect. The list of products, excluded from the Free Trade Agreement with Russia, is revised annually. In 2009. the CIS countries (Russia is a participating country of CIS) was the third largest export partners (7.3%) and the second largest import partners (18.5%) of Serbia.[26]

Serbia signed a FTA with EFTA members, Norway, Switzerland, Iceland and Liechtenstein (active as of April 2010) and with Turkey that will take effect in May 2010.[35] Trade with the U.S. is pursued under the Generalized System of Preferences (GSP). U.S. trade benefits provide for a preferential duty-free entry for app. 4,650 products.[35]

External trade
Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Exports (mil. USD): 1,720 2,074 2,756 3,523 4,480 6,431 8,823 10,974 8,345 9,794 11,780 11,353
Imports (mil. USD): 4,260 5,614 7,477 10,755 10,461 13,174 19,165 24,332 15,808 16,471 19,862 19,014
Trade Balance (mil. USD): -2,540 -3,540 -4,721 -7,232 -5,981 -6,743 -10,342 -13,358 -7,463 -6,677 -8,082 -7,661
Exports/Imports (%): 40.4 36.9 36.9 32.8 42.1 48.8 46.0 45.1 52.8 59.5 59.3 59.7
Source: Statistical Office of Serbia


Top 5 export partners of Serbia in 2011:

Top 5 import partners of Serbia in 2011:

Top 5 export goods of Serbia in 2010:

Top 5 import goods of Serbia in 2010:
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Foreign direct investments

Leading investor nations in Serbia as at Jan 2013:

Serbia is open to foreign direct investment, and attracting FDI is set as a priority for the government of Serbia, which provides both financial and tax incentives to companies willing to invest.[37] Serbia has a long history of international commerce, even under communism, and it once attracted a sizeable foreign company presence, mainly due to its access to Comecon, and Non-Aligned Movement markets. Today, leading investor nations in Serbia include: Italy ($2.69bn), Austria ($2.65bn), Norway ($2.17bn), Belgium ($2.00bn) and Greece ($1.66n).[28] In a recent poll for investors, conducted by the German Chamber of Commerce, Serbia came on top as an investment destination in South-Eastern Europe, with 97% of companies being pleased with business conditions.[38] During the first 3 quarters of 2011 foreign direct investment topped USD$ 1.2 billion up about USD$ 560 million from the same period in 2010.[39]

Foreign direct investments
Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Cash investments (USD Billions) 0.05 0.17 0.50 1.38 0.98 1.61 4.47 3.56 3.36 2.40 n/a n/a
Total investments (USD Billions) 0.05 0.16 0.55 1.41 1.03 2.09 5.12 3.98 2.99 1.92 1.01 3.01
Total per capita (USD) 6.7 21 73.3 189.3 138.8 282.4 693.8 541.5 412.4 266.7 141.3 422.7
Cash investments source: Serbia Investment and Export Promotion Agency, Total investments source: UN Conference on trade and development


Inward FDI by Industries (2005–2009):

Blue-chip corporations making investments in Serbia include: US Steel, Philip Morris, Microsoft, Fiat, Coca-Cola, Lafarge, Siemens, Carlsberg and others.[27][41] In the energy sector, Russian energy giants, Lukoil and Gazprom have made large investments.[42] The banking sector has attracted investments from Banca Intesa (Italy), Crédit Agricole and Société Générale (France), HVB Bank (Germany), Erste Bank, Raiffeisen Zentralbank and Hypo Group Alpe Adria (Austria), Eurobank EFG and Piraeus Bank (Greece), and others.[43] United States based Citibank, opened a representative office in Belgrade in December 2006.[44] In the trade sector, biggest foreign investors are France's Intermarché, German Metro Cash and Carry, Greek Veropoulos, and Slovenian Mercator.

Although most investments in previous years came primarily from the EU, greater interest is being shown from countries like India and Russia. On September 25, 2007, the Government of Serbia and Indian firm Embassy Group signed a memorandum of understanding on information technology park construction. Embassy Group plans to build their first technological park in Europe at an area of 280ha in the town of Indjija near Belgrade. The five-year plan predicts building a business area of 250,000 square meters and employing around 25,000 people. This is planned as the largest Greenfield investment in Serbia, accounting for a minimum of $600 million.[45] On December 24, 2008, presidents of Serbia and Russia, Boris Tadic and Dmitry Medvedev have signed oil and natural gas deal under which Gazprom's oil arm Gazprom Neft gets a 51% stake in state-owned Petroleum Industry of Serbia for 400 million euros in cash and 550 million euros in investments. As a part of the deal, a 400 km (250 mi) leg of the South Stream gas pipeline will be built through Serbia, an investment valued at another 2 billion euros.[46]

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Domestic currency

Main article: Serbian dinar
100 Serbian dinar banknote

The official currency in Serbia is the Serbian dinar - RSD (1 dinar is lowest unit), RSD = 0.0095 Euro = 0.0121 USD (08/31/2010 Interbank exchange rate).

Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
USD exchange 67.67 RSD 58.98 RSD 54.64 RSD 57.94 RSD 72.22 RSD 59.98 RSD 53.73 RSD 62.90 RSD 66.73 RSD 82.30 RSD 69.85 RSD
Source: Ministry of Finance of Serbia
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National statistics

Government budget (December 2011)
Revenues: 1989.5 Billion RSD
Expenditures: 2007.9 Billion RSD

Source: Ministry of Finance of Serbia

Employment by sector (December 2011)
Tertiary: 49.7%
Secondary: 26.2%
Primary: 24.1%
Total labor force: 2.87 Million
Unemployment rate: 23.7% (November 2011)[25]

Source: Statistical Office of Serbia

External debt (December 2011)
Public sector: $6.50 bn
Private sector: $7.00 bn
Total: $13.50bn

Source: National Bank of Serbia

Energy (December 2012)

Electricity - production: 37.86 billion kWh

Electricity - production by source:
fossil fuel: 66%
hydro: 30%
nuclear: 0%
other: 4%

Electricity - consumption: 37.37 billion kWh (2012)

Electricity - exports: 1.24 billion kWh (2012)

Electricity - imports: 1.5 billion kWh (2012)

Oil - production: 23,160 barrels per day (3,682 m3/d)

Oil - consumption: 81,540 barrels per day (12,964 m3/d) (2011)

Oil - proved reserves: 77.5 million barrels (12.32×10^6 m3) (1 January 2006)

Natural gas - production: 557 million cubic metres (2012)

Natural gas - consumption: 2.84 billion cubic metres (2012)

Natural gas - exports: 0 cubic metres (2012)

Natural gas - imports: 2.61 billion cubic metres (2012)

Natural gas - proved reserves: 48.14 billion cu m (1 January 2012 est.)

Source: [15]

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See also

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References

  1. ^ a b c d IMF World Economic Outlook April 2013
  2. ^ a b Filipovic, Gordana (10 February 2012). "IMF Sees Serbian 2012 GDP Up 0.5%, Jobless Rate ‘a Concern'". Bloomberg. 
  3. ^ a b c d e f g CIA Factbook Serbian GDP
  4. ^ [1]
  5. ^ a b CIA
  6. ^ [2]
  7. ^ a b Labor Force Survey, October 2008
  8. ^ [3]
  9. ^ a b c d Serbian Statistical Institute
  10. ^ "Doing Business in Serbia 2012". World Bank. Retrieved 2011-11-21. 
  11. ^ [4]
  12. ^ a b c d e f g [5]
  13. ^ a b http://webrzs.stat.gov.rs/axd/dokumenti/saopstenja/ST11/st11122008.pdf
  14. ^ Filipovic, Gordana (12 January 2012). "Serbian 2012 Elections May Hamper Foreign Investment Inflows". Bloomberg. 
  15. ^ [6]
  16. ^ [7]
  17. ^ a b [8]
  18. ^ "Sovereigns rating list". Standard & Poor's. Retrieved 26 May 2011. 
  19. ^ a b Rogers, Simon; Sedghi, Ami (15 April 2011). "How Fitch, Moody's and S&P rate each country's credit rating". The Guardian (London). Retrieved 28 May 2011. 
  20. ^ "Serbia maintains rating, recovery slower". 3 August 2010. Retrieved 2011-05-23. 
  21. ^ [9]
  22. ^ "NATO's Latest Target: Yugoslavia's Economy". 
  23. ^ a b c d e f [10] IMF
  24. ^ [11]
  25. ^ a b [12] Statistical Office of Serbia
  26. ^ a b c d e http://webrzs.stat.gov.rs/axd/en/index1.php?SifraVesti=391&Link=
  27. ^ a b "Success stories". 
  28. ^ a b "B92 News Agency: 12-year FDI inflow worth EUR 16bn; Italy tops list". 
  29. ^ a b c d e f g h i "Serbia Investment and Export Promotion Agency: Strong FDI Figures". 
  30. ^ Report for Selected Countries and Subjects
  31. ^ Use of Gross Domestic Product (GDP)
  32. ^ Industrial production indices
  33. ^ Europe Online Magazine
  34. ^ http://www.balkaninsight.com/en/article/serbia-gets-economic-support-from-russia-germany
  35. ^ a b c d e Liberalized Trade
  36. ^ a b [13]
  37. ^ "SIEPA: Investment incentives". 
  38. ^ "Serbia ranked first in investors' poll". 
  39. ^ "Serbia Reaps High Foreign Investment". 
  40. ^ [14]
  41. ^ "US embassy: private sector investments". 
  42. ^ "Ministry of economic relations, Russian Federation". 
  43. ^ "National Bank of Serbia: List of banks". 
  44. ^ "Citibank to open office in Serbia". 
  45. ^ "AFP: Indians agree deal for Serbia's first IT park". 
  46. ^ "RIA Novosti: Russia, Serbia sign oil and gas deal". 
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External links

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Last modified on 14 May 2013, at 01:19