Economy of Serbia

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Economy of Serbia
Central bank, Belgrade, Serbia.jpg
The National Bank of Serbia
Currency Serbian dinar (RSD)
Fiscal year Calendar year
Trade organisations CEFTA, BSEC
Statistics
GDP $90.01 billion (2012 estimate, PPP)[1]
$48.56 billion (2012 estimate, nominal)[2]
GDP growth 1.95% (2011)[3]
GDP per capita $12,121 (2012 estimate, PPP)[4]
$6,539 (2012 estimate, nominal)[5]
GDP by sector agriculture: 12.7%
industry: 23.5%
services: 63.8% (2009)[6]
Inflation (CPI) 5.6% (January 2012)[7]
Population
below poverty line		 9.2% (2011 est.)[8]
Labour force 3.26 Million (2008)[9]
Labour force
by occupation		 agriculture: 24.1%
industry: 27.2%
services: 48.7% (2008)[9]
Unemployment 23.7% (November 2011)[10]
Average gross salary $ 626.12 (January 2012)[11],
€ 476.03 (January 2012)[12]
Average net salary $ 451.32 (January 2012)[13],
€ 343.13 (January 2012)[14]
Main industries base metals, furniture, food processing, machinery, chemicals, sugar, tires, clothes, pharmaceuticals
Ease of Doing Business Rank 92nd[15]
External
Exports $11.777 bn (2011)[16]
Export goods iron and steel ($0.992bn), non-ferrous metals ($0.878bn), electrical machines ($0.745bn), cereals ($0.732bn), vegetables ($0.658bn), military hardware ($0.256bn)[17]
Main export partners EU countries (54.2%), CEFTA countries (33%), CIS countries (7.3%)[18]
Imports $20.139 bn (2011)[17]
Import goods oil ($2.259bn), natural gas ($1.186bn), vehicles ($1.072bn), industrial machines ($0.850bn) electrical machines ($0.838bn)[17]
Main import partners EU countries (52.9%), CIS countries (18.5%), CEFTA countries (7.8%)[18]
FDI stock $3.02 billion (2011)[19]
Gross external debt $34.6 billion (2010 est.)
Public finances
Public debt $12.1bn (December 2010)
Revenues $9.9 bn (2010 budget)
Expenses $10.1 bn (2010 budget)
Credit rating Standard & Poor's:[20]
BB (Domestic)
BB (Foreign)
BB (T&C Assessment)
Outlook: Stable[21]
Fitch:[21]
BB-
Outlook: Stable
Dun & Bradstreet:[22]
DB4d
Foreign reserves $15.62 billion (October 2011)
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),[6] industry (23.5% of GDP),[6] and agriculture (12.7% of GDP).[6] 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.[23]

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 capita (nominal) went from $1,160 in 2000 to $6,539 in 2012[24]. Furthermore, it has been preparing for membership in the European Union, its most important trading partner. Estimated GDP (nominal) of Serbia for 2012 is $48.56 billion[25], which is $6,539 per capita[26]. Estimated GDP (PPP) of Serbia for 2012 is Intl. $90.01 billion[27], which is Intl. $12,121 per capita[28]. 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.[29] At present, main economic problems are high unemployment rate (23.7%, November 2011)[30] and a large trade deficit ($7.2 billion, 2009).[31]

In recent years, Serbia has seen an increasingly swift foreign direct investment trend, including 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.[32] By countries, most cash investments in 2005-2009 period came from Austria ($2.68bn),[33] Greece ($1.62bn),[33] Norway ($1.55bn),[33] Germany ($1.30bn),[33] and Italy ($0.95bn),[33] while major investor countries also include Slovenia,[33] Netherlands,[33] Russia[33] and France.[33] 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.[33]

Contents

[edit] Macroeconomic trends

The average growth of Serbia's GDP in the last ten years were 4.45% per year.[34] GDP structure by sector in 2009 was: services 63.8%, industry 23.5%, agriculture 12.7%.[6] GDP structure by components in 2008 was: private consumption 74.3%, public consumption 20.6%, investments 28.6%, exports 30,7%, imports 54,2%. [35]













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 39.0 47.7 40.1 38.0 46.4 48.5 52.5
GDP growth rate 5.3% 5.6% 3.9% 2.4% 9.3% 5.4% 5.2% 6.9% 5.5% -3.0% 1.8% 1.9% 1.1% 4.0%
GDP Per Capita (USD) 1152 1524 2012 2613 3169 3391 3958 5277 6467 5438 5139 6267 6539 7058
GDP (PPP) per capita (Geary-Khamis $) 5655 6100 6468 6786 7598 8315 8928 9722 10316 10060 10252 10661 12121 13122
Source: IMF [36]

Serbia's primary industries include processing of base metals, furniture, food processing, machinery, chemicals, sugar, tires, clothes and pharmaceuticals.[6] The main export products of Serbia in 2009. ware: iron and steel ($0.64bn), clothes ($0.53bn), cereals ($0.47bn), vegetables ($0.45bn), non-ferrous metals ($0.44bn).[31] The main Serbian agriculture products are wheat, maize, sugar beets, sunflower, raspberries, beef, pork and milk.[6] The average growth of Serbian industry total from 2000 to 2008 were 3.07% per year.[37]

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

[edit] 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.

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

[edit] External trade

Serbian exports in 2009
Serbian imports in 2009

Serbia signed Free Trade Agreement (FTA) with the EU enabling exports of all products originating from Serbia without customs and other fees.[38] 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.[31]

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.[38] In 2009, the CEFTA countries were the second largest export destinations (33%) and third largest import destinations (7.8%) of Serbia.[31]

Serbia signed a FTA with Russia.[38] 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.[31]

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.[38] 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.[38]

External trade
Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Exports (mil. USD): 1,558 1,721 2,075 2,477 3,523 4,553 6,428 8,825 10,973 8,344 9,794 11,777
Imports (mil. USD): 3,330 4,261 5,614 7,333 10,753 10,575 13,172 18,554 22,875 16,056 16,734 20,139
Trade Balance (mil. USD): -1,772 -2,540 -3,539 -4,856 -7,230 -6,022 -6,744 -9,729 -11,902 -7,712 -6,939 -8,362
Exports/Imports (%): 46.8 40.4 37.0 33.8 32.8 41.1 48.8 47.6 48.0 52.0 58.5 58.5
Source: Statistical Office of Serbia 2000-2009 data, 2010 data, 2011 data


Top 5 export partners of Serbia in 2010:

Top 5 import partners of Serbia in 2010:

Top 5 export goods of Serbia in 2010:

Top 5 import goods of Serbia in 2010:

[edit] Foreign direct investments

Leading investor nations in Serbia:

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.[40] 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: Austria ($2.68bn), Greece ($1.62bn), Norway ($1.55bn), Germany ($1.30bn) and Italy ($0.95bn).[33] In a recent poll for investors, conducted by the German Chamber of Commerce, Serbia came on top as an investment destination in South-Eastern Europe, with 97% of companies being pleased with business conditions.[41] During the first 3 quarters of 2011 foreign direct investment topped USD$ 1.2 billion up about USD$ 560 million from the same period in 2010.[42]

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.[32][44] In the energy sector, Russian energy giants, Lukoil and Gazprom have made large investments.[45] 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.[46] United States based Citibank, opened a representative office in Belgrade in December 2006.[47] 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.[48] 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.[49]

[edit] 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), except Kosovo and Metohija, which uses the Euro.

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

[edit] National statistics

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

Source: Ministry of Finance of Serbia

Average salary (January 2012)
Average monthly gross salary: RSD 50 829[50], US$ 626.12[50], € 476.03[50]
Average monthly net salary (tax, medicare and retirement subtracted): RSD 36 639[50], US$ 451.32[50], € 343.13[50]

Source: Statistical Office of Serbia, RSD to US$ and EUR calculation is based on 31/01/2012 Interbank exchange rate.

Employment by sector (December 2011)
Tertiary: 49.7%
Secondary: 26.2%
Primary: 24.1%
Total labor force: 4.20 Million
Unemployment rate: 23.7% (November 2011)[51]

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

[edit] See also

[edit] References

  1. ^ [1] IMF
  2. ^ [2] IMF
  3. ^ http://www.bloomberg.com/news/2012-02-10/imf-sees-serbian-2012-gdp-up-0-5-jobless-rate-a-concern-1-.html
  4. ^ [3] IMF
  5. ^ [4] IMF
  6. ^ a b c d e f g CIA Factbook Serbian GDP
  7. ^ [5]
  8. ^ CIA
  9. ^ a b Labor Force Survey, October 2008
  10. ^ [6] Statistical Office of Serbia
  11. ^ [http://webrzs.stat.gov.rs/WebSite/public/PublicationView.aspx?pKey=41&pLevel=1&pubType=2&pubKey=1002 ]
  12. ^ [7]
  13. ^ [8]
  14. ^ [9]
  15. ^ "Doing Business in Serbia 2012". World Bank. http://www.doingbusiness.org/data/exploreeconomies/serbia/. Retrieved 2011-11-21. 
  16. ^ [10]
  17. ^ a b c d e f g [11]
  18. ^ a b http://webrzs.stat.gov.rs/axd/dokumenti/saopstenja/ST11/st11122008.pdf
  19. ^ Filipovic, Gordana (12 January 2012). "Serbian 2012 Elections May Hamper Foreign Investment Inflows". Bloomberg. http://www.bloomberg.com/news/2012-01-12/serbian-2012-elections-may-hamper-foreign-investment-inflows.html. 
  20. ^ "Sovereigns rating list". Standard & Poor's. http://www.standardandpoors.com/ratings/sovereigns/ratings-list/en/eu/?subSectorCode=39. Retrieved 26 May 2011. 
  21. ^ 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). http://www.guardian.co.uk/news/datablog/2010/apr/30/credit-ratings-country-fitch-moodys-standard. Retrieved 28 May 2011. 
  22. ^ "Serbia maintains rating, recovery slower". 3 August 2010. http://www.b92.net/eng/news/business-article.php?yyyy=2010&mm=08&dd=03&nav_id=68851. Retrieved 2011-05-23. 
  23. ^ "NATO's Latest Target: Yugoslavia's Economy". http://www.hartford-hwp.com/archives/62/306.html. 
  24. ^ [12] IMF
  25. ^ [13] IMF
  26. ^ [14] IMF
  27. ^ [15] IMF
  28. ^ [16] IMF
  29. ^ [17]
  30. ^ [18] Statistical Office of Serbia
  31. ^ a b c d e http://webrzs.stat.gov.rs/axd/en/index1.php?SifraVesti=391&Link=
  32. ^ a b "Success stories". http://www.siepa.gov.rs/site/en/home/2/success_stories/. 
  33. ^ a b c d e f g h i j k "Serbia Investment and Export Promotion Agency: Strong FDI Figures". http://www.siepa.gov.rs/site/en/home/1/investing_in_serbia/strong_fdi_figures/. 
  34. ^ Report for Selected Countries and Subjects
  35. ^ Use of Gross Domestic Product (GDP)
  36. ^ [19] IMF
  37. ^ Industrial production indices
  38. ^ a b c d e Liberalized Trade
  39. ^ a b [20]
  40. ^ "SIEPA: Investment incentives". http://www.siepa.gov.rs/site/en/home/1/brief_guide/reasons_to_invest/investmentincentives/. 
  41. ^ "Serbia ranked first in investors' poll". http://www.emportal.co.rs/en/news/serbia/60383.print.html. 
  42. ^ "Serbia Reaps High Foreign Investment". http://www.turkishweekly.net/news/127056/serbia-reaps-high-foreign-investments-.html. 
  43. ^ [21]
  44. ^ "US embassy: private sector investments". http://belgrade.usembassy.gov/partnership/invest.html. 
  45. ^ "Ministry of economic relations, Russian Federation". http://www.economy.gov.ru/wps/wcm/myconnect/economylib/mert/welcome_eng/pressservice/eventschronicle/doc1229612064630. 
  46. ^ "National Bank of Serbia: List of banks". http://www.nbs.rs/export/internet/english/15/linkovi_banke2.html. 
  47. ^ "Citibank to open office in Serbia". http://www.upi.com/Business_News/2006/12/12/Citibank-to-open-office-in-Serbia/UPI-11571165937687/. 
  48. ^ "AFP: Indians agree deal for Serbia's first IT park". http://afp.google.com/article/ALeqM5i-uy01R25tjkLXzh_gMQf0h2-Uqg. 
  49. ^ "RIA Novosti: Russia, Serbia sign oil and gas deal". http://en.rian.ru/russia/20081224/119157586.html. 
  50. ^ a b c d e f Statistical Office of Serbia
  51. ^ [22] Statistical Office of Serbia

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