Economy of Serbia
 | |
| Currency | Serbian dinar (RSD) |
|---|---|
| Calendar year | |
Trade organisations | CEFTA, BSEC |
| Statistics | |
| GDP | $86.93 billion (2009 estimate, PPP) $58.83 billion (2009 estimate, nominal) |
GDP growth | 6.1% (2008) [1] |
GDP per capita | $11,790 (2009 estimate, PPP) $7 951 (2009 estimate, nominal [2] |
GDP by sector | agriculture: 12.3% industry: 24.2% services: 63.5% (2007) [3] |
| 6.8% (2008) [4] | |
Labour force | 3.26 Million (2008) [5] |
Labour force by occupation | agriculture: 24.1% industry: 27.2% services: 48.7% (2008) [6] |
| Unemployment | 13% (April 2009) [7] |
Main industries | pharmaceuticals, agricultural machinery, electrical and communication equipment, paper and pulp, lead, transportation equipment, food [8] |
| External | |
| Exports | $10,973bn (2008) [9] |
Export goods | iron and steel ($1.4bn), non-ferrous metals ($0.7bn), clothes ($0.6bn), fruit and vegetables ($0.5bn) and metal products, n.e.c ($0.5bn) |
Main export partners | EU countries (54.2%), CEFTA countries (33%), CIS countries (7.3%) [10] |
| Imports | $22,999bn (2008) [11] |
Import goods | oil ($2.9bn), road vehicles ($1.8bn), natural gas ($1.2bn), iron and steel ($1.1bn), industrial machinery ($1.1bn) |
Main import partners | EU countries (52.9%), CIS countries (18.5%), CEFTA countries (7.8%) [12] |
| Public finances | |
| $11.4bn (December 2008)[13] | |
| Revenues | $9.7 bn (2009 budget) [14] |
| Expenses | $10.4 bn (2009 budget) [15] |
All values, unless otherwise stated, are in US dollars. | |
Serbia has an economy based mostly on various services, which account for about 63% of the GDP [1]. In the late 1980s, at the beginning of the process of economic transition from the planned economy to the free market, Serbia's economy had a favorable position, but it was gravely impacted by UN economic sanctions 1992-1995, as well as excessive damage to infrastructure and industry during the NATO bombing in 1999. Total damage of NATO bombing is estimated at $30 billion in a detailed study done by 17 renewed economists
[2].
After the ousting of former Federal Yugoslav President Slobodan Milosevic in October 2000, the country went through the economic liberalization, and experienced fast economic growth (GDP per capita went from $1,160 in 2000 to $6,782 in 2008[3]). Furthermore, it has been preparing for the membership in the European Union, its most important trading partner. Estimated GDP (PPP) of Serbia for 2008 is $78.83 billion which is $10 679 per capita. At present, main economic problems are high unemployment rate (14%) and large trade deficit ($11 billion). Being the only European country with free trades agreements with both the EU and Russia [4], Serbia expects more economic impulses and high growth rates in the coming years.
In recent years, Serbia has seen an increasingly swift foreign direct investment trend, including many blue-chip companies (US Steel, Philip Morris, Microsoft, FIAT, Lukoil, Coca-Cola, Gazprom, Lafarge, Siemens, Carlsberg... [5] [6] [7] ). By countries, most cash investments in 2000-2007 period came from Austrian companies ($2.2bn), followed by those from Greece ($1.6bn), Norway ($1.6bn), and Germany ($1.4bn) [8]. Companies from these four EU countries account for two thirds of all cash investments in that period. More investments are expected in the future, with talks already starting with Volkswagen on possible automobile assembly, as well as with Ikea (furniture manufacturer willing to invest approximately US$2 Billion in southern Serbia) and General motors (for the construction of locomotive engines).
Macroeconomic trends
GDP Year GDP (USD Billions) GDP growth rate GDP Per Capita (USD) GDP (PPP) per capita (Geary-Khamis $) 2000 8.7 4.5% 1,160 5,713 2001 11.5 4.8% 1,536 6,177 2002 15.3 4.2% 2,036 6,512 2003 19.8 2.5% 2,640 6,857 2004 23.8 8.2% 3,186 7,638 2005 25.3 6.0% 3,408 8,357 2006 29.7 5.6% 4,009 9,141 2007 39.9 7.1% 5,387 10,071 2008 50.0 5.6% 7,054 10,792 Source: IMF World economic outlook, October 2008 [16]
Public debt (year-end) Year Debt (Billions EUR) Debt (Percent of GDP) 2000 14.17 169.3% 2001 13.43 102.2% 2002 11.53 69.5% 2003 11.02 64.3% 2004 9.68 53.3% 2005 10.28 50.2% 2006 9.35 36.2% 2007 8.88 29.4% 2008 8.78 25.3% Source: Ministry of finance [17]
Foreign exchange reserves (year-end) Year National bank (bn USD) Domestic banks (bn USD) Total (bn USD) 2000 0.52 0.37 0.89 2001 1.17 0.64 1.81 2002 2.28 0.78 3.06 2003 3.55 0.89 4.44 2004 4.24 0.91 5.15 2005 5.84 0.70 6.54 2006 11.89 0.75 12.64 2007 14.22 1.85 16.07 2008 11.48 1.37 12.85 Source: National Bank of Serbia [18]
External trade 2000 2001 2002 2003 2004 2005 2006 2007 2008 Exports (mil. USD): 1,558 1,721 2,075 2,477 3,523 4,553 6,428 8,825 10,973 Imports (mil. USD): 3,330 4,261 5,614 7,333 10,753 10,575 13,172 18,554 22,999 Trade Balance (mil. USD): -1,772 -2,540 -3,539 -4,856 -7,230 -6,022 -6,744 -9,729 -12,026 Exports/Imports (%): 46.8 40.4 37.0 33.8 32.8 41.1 48.8 47.6 47.7 Source: Statistical office, Republic of Serbia 2000-2007 data, 2008 data
Industrial production growth rate Year Mining and quarrying Manufacturing Electricity, gas and water supply Industry total 2000 8.1 14.5 2.1 11.4 2001 -12.8 0.7 1.2 0.1 2002 1.6 2.7 -1.7 1.8 2003 0.8 -4.6 2.3 -3.0 2004 -0.7 9.6 0.1 7.1 2005 2.1 -0.7 6.6 0.8 2006 3.5 5.4 2.2 4.7 2007 -0.6 4.3 2.8 3.7 2008 3.6 0.8 1.8 1.1 Source 1: Development bureau, Republic of Serbia [19] Source 2: Statistical office, Republic of Serbia [20]
Foreign Direct Investments
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 [9]. 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: Norway, Germany, Austria, Greece [10]. 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 [11].
Foreign direct investments Year Cash investments (USD Billions) Total investments (USD Billions) Total per capita (USD) 2000 0.01 0.05 5 2001 0.03 0.16 15 2002 0.33 0.55 51 2003 1.07 1.41 133 2004 0.80 1.03 98 2005 1.44 2.09 199 2006 4.29 5.12 499 2007 2.00 3.98 381 2008 2.36 n/a n/a Cash investments source: National Bank of Serbia [21] Total investments source: UN Conference on trade and development [22]
Blue-chip corporations making investments in Serbia include: US Steel, Philip Morris, Microsoft, FIAT, Coca-Cola, Lafarge, Siemens, Carlsberg and others [12] [13]. In the energy sector, Russian giants Lukoil and Gazprom have made large investments [14]. The banking sector has attracted investments from Banca Intesa (Italy), Credit Agricole and Societe Generale (France), HVB Bank (Germany), Erste Bank (Austria), Eurobank EFG and Piraeus Bank (Greece), and others [15] . U.S. based Citibank, opened a representative office in Belgrade in December 2006 [16]. In the trade sector, biggest foreign investors are France's Intermarche, German Metro Cash & Carry, Greek Veropoulos, and Slovenian Mercator.
Although most of investments in previous years came from the EU, there are those from other countries like India or 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 [17]. 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 (248-mile) leg of the South Stream gas pipeline will be built through Serbia, an investment valued at another 2 billion euros [18].
Currency
Currency in use: Serbian dinar = 0.0106 Euro = 0.0137 USD (Jan 2009), except Kosovo and Metohija, which uses the Euro.
| Year | USD exchange | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2000 | 44.45 RSD | ||||||||
| 2001 | 66.66 RSD | ||||||||
| 2005 | 66.72 RSD | ||||||||
| 2007 | 58.45 RSD | ||||||||
| 2008 | 52.39 RSD | ||||||||
| Source: IMF [23] | |||||||||
- National Bank - National Bank of Serbia.
Statistics
- Government budget (2009)
- Revenues: 698.7 Billion RSD ($9.70 Billion)
- Expenditures: 748.3 Billion RSD ($10.39 Billion)
Source: Ministry of finance [24]
- Income (December 2008)
- Average monthly gross income: RSD 53 876, US$ 744
- Average monthly net income (tax, medicare and retirement subtracted): RSD 38 626, US$ 533
Source: Statistical office, Republic of Serbia [25]
- Employment by sector (October 2008)
- Tertiary: 48.7%
- Secondary: 27.2%
- Primary: 24.1%
- Total labor force: 3.26 Million
- Unemployment rate: 14%
Source: Statistical office, Republic of Serbia [26]
- External debt (November 2008)
- Public sector: $8.49 bn
- Private sector: $19.50 bn
- Total: $27.99 bn
Source: National bank of Serbia [27]
See also
References
- ^ "CIA world factbook".
- ^ "Zavrsni racun, book in Serbian".
- ^ "IMF World outlook database, October 2008".
- ^ "SIEPA: Free trade agreements".
- ^ "SIEPA: Success stories".
- ^ "US embassy: private sector investments".
- ^ "Ministry of economic relations, Russian Federation".
- ^ "National Bank of Serbia: FDI by country".
- ^ "SIEPA: Investment incentives".
- ^ "National Bank of Serbia: FDI by country".
- ^ "Serbia ranked first in investors' poll".
- ^ "SIEPA: Success stories".
- ^ "US embassy: private sector investments".
- ^ "Ministry of economic relations, Russian Federation".
- ^ "National Bank of Serbia: List of banks".
- ^ "Citibank".
- ^ "AFP: Indians agree deal for Serbia's first IT park".
- ^ "RIA Novosti: Russia, Serbia sign oil and gas deal".