Serbia: Economic and Political Overview
In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response
For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.
The economy of Serbia experienced rapid growth from 2001–2008, although the global financial crisis hit hard on the country’s economy, showing its structural weaknesses and the need for a full transition to a market economy. Despite turning into negative territory in 2020 as a consequence of the COVID-19 crisis, Serbia’s GDP rebounded strongly in 2021 (+7.4%) and continued its positive trend in 2022 when growth was estimated at 2.3% by the Statistical Office of Serbia, with domestic demand as the main source of growth. Amid ongoing weakness in export markets, the IMF forecasts a GDP increase of 2.4% for 2023, before growth revives to 3.5% in 2024 as monetary policy is eased, lower inflation reduces pressure on disposable incomes and external conditions improve.
The general government budget recorded a deficit of 3.1% of GDP in 2022 (from 4.1% one year earlier), lower than the target of 3.9% set in the revised budget adopted in November, as inflation fuelled tax revenue and contained current expenditure growth, partly balancing net lending of around 1.8% of GDP to cover losses in the energy sector. The 2023 budget projects a 3.3% deficit with total revenue of EUR 15.75 billion, 7.8% more than in the amended 2022 budget. Tax revenues are planned in the amount of EUR 13.61 billion, and non-tax revenues in the amount of EUR 1.71 billion. The public debt-to-GDP ratio stood at an estimated 54.4% in 2022 and should follow a downward trend in 2023 (50.3%) and 2024 (47.3% - IMF) thanks to continued primary surpluses. Inflation reached an 11-year high in December 2022 and averaged 11.5% over the year. Due to the expected increase in inflation in the 1st quarter of 2023, the National Bank of Serbia continued with a strong increase in the reference interest rate by 50bp to 5.0%. For the year as a whole, inflation is expected to remain high but somewhat moderate to 8.3% in 2023, with a more consistent decrease the following year (4.2% as per the IMF projections). Meanwhile, negotiations for EU membership continued: Serbia has met the criteria to open new sets of chapters in the EU accession talks (including the Green Agenda and sustainable connectivity), although the normalisation of relations with Kosovo is slow and those with Croatia and Bosnia-Herzegovina are complicated. The negotiations are expected to end in 2024. The main challenges that Serbia faces are: stagnant household incomes, a need for private-sector job creation and structural reform of public enterprises as well as strategic reforms in the public sector. An ineffective judicial system, a high level of corruption and an ageing population represent other challenges that the country will have to face in the long term.
Serbia's unemployment rate, relatively low compared to its neighbours in the Balkans, remains significantly higher than the European average: in 2022, it stood at 9.9%, with a marginal decrease expected in the next couple of years (9.5% in 2024 as per the IMF projections). The standard of living of the Serbian population remains significantly below the EU average and the country's informal sector is substantial. However, the authorities have the support of the EU and international financial institutions to modernise infrastructure and support investment in the business community. Eurostat estimates that the number of people at risk of poverty fell further to 29.8% in 2020 (was 39.5% five years earlier), while the GDP per capita (PPP) stood at USD 24,084 in 2022 (IMF).
| Main Indicators | 2020 | 2021 | 2022 (E) | 2023 (E) | 2024 (E) |
|---|---|---|---|---|---|
| GDP (billions USD) | 53.36 | 63.08 | 70.91 | 73.96 | 80.54 |
| GDP (Constant Prices, Annual % Change) | -0.9 | 7.6 | 2.3 | 2.0 | 3.0 |
| GDP per Capita (USD) | 7,734 | 9,180 | 10,361 | 10,850 | 11,863 |
| General Government Balance (in % of GDP) | -6.1 | -4.5 | -1.2 | -1.1 | -0.8 |
| General Government Gross Debt (in % of GDP) | 56.9 | 56.3 | 53.5 | 50.2 | 46.1 |
| Inflation Rate (%) | 1.6 | 4.1 | 12.0 | 12.2 | 5.3 |
| Unemployment Rate (% of the Labour Force) | 9.7 | 11.0 | 9.4 | 9.2 | 9.1 |
| Current Account (billions USD) | -2.20 | -2.72 | -4.87 | -4.49 | -4.58 |
| Current Account (in % of GDP) | -4.1 | -4.3 | -6.9 | -6.1 | -5.7 |
Source: IMF – World Economic Outlook Database , Latest available data
Note: (e) Estimated Data
Serbia has a workforce of 3.16 million out of its 6.8 million population. The agricultural sector accounts for 6.3% of the country's GDP (its share has been decreasing in the past years), employing nearly 16% of the workforce (World Bank, latest data available). Serbia has 3.4 million hectares of agricultural land. Its continental climate with cold winters and hot humid summers is ideal for intensive fruit production. Fruit production consists mainly of apples, grapes, plums, peaches, pears and berries. Recently Serbia has been widely using fruit processing to obtain products like brandies, jams, juices, and compotes. The main crops are maize and wheat, together with barley, oat and rye. Figures from the national Statistical Office show that agricultural production volume fell by 8% in 2022 compared to one year earlier.
Serbia has significant quantities of coal, lead, zinc, copper and gold, but the lack of investment, which has affected the mining sector for several years, prevents the country's economy from benefiting from this wealth. The industrial sector is likewise in need of modernization and foreign investment, currently contributing one-fourth of the country's GDP and employing 27% of the workforce. The country’s main industries include automotive, food processing, chemicals, base metals, furniture, pharmaceuticals, machinery, sugar, tires and clothing. The manufacturing sector is estimated to account for 13% of GDP. According to the national statistical institute, Serbia's industrial production increased by 1.5% year-on-year in 2022, while manufacturing grew by 1.7%.
Services make up the main sector of activity and account for 51.4% of Serbia's GDP, employing 57% of the workforce. The IT industry is one of the fastest-growing, same as for the tourist sector which represented 6.9% of GDP before the pandemic. Following a decline due to the COVID-19 crisis, tourist overnight stays increased by 37.5% y-o-y in 2022. In the same year, retail trade turnover recorded grew by 6.4%, while the wholesale trade turnover increased by 19% in nominal terms (Statistical Office of the Republic of Serbia). Concerning the banking sector, foreign banks account for 86% of the market, while state-owned banks and domestic private banks account for 7% each (EBF – latest data available).
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
|---|---|---|---|
| Employment By Sector (in % of Total Employment) | 15.6 | 27.4 | 57.0 |
| Value Added (in % of GDP) | 6.3 | 25.0 | 51.4 |
| Value Added (Annual % Change) | -5.7 | 8.6 | 8.5 |
Source: World Bank - Latest available data.
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| Monetary Indicators | 2016 | 2017 | 2018 | 2019 | 2020 |
|---|---|---|---|---|---|
| Serbian Dinar (RSD) - Average Annual Exchange Rate For 1 MUR | 3.13 | 3.13 | 2.95 | 2.96 | 2.62 |
Source: World Bank - Latest available data.
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The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024
See the country risk analysis provided by Coface.
Serbia is gradually becoming more open to international trade, which represents 117% of GDP (World Bank, latest data available). The Stabilisation and Association Agreement between the EU and Serbia and the steady growth of foreign direct investment inflows have led to a constant increase in the volume of foreign trade. The country’s main exports are electrical machines and apparatus (11.3%); metal ores and residues (6.9%); power engines and motors (5%); iron and steel (4.4%); and fruit and vegetables (4.2%); whereas imports are led by oil and oil derivatives (7.7%); electrical machines and apparatus (6.1%); natural gas (4.4%); electricity (4.1%); and medical and pharmaceutical products (3.9% - data Statistical Office of the Republic of Serbia, 2022).
The country's main customers are Germany (13.7%), Bosnia-Herzegovina (7.5%), Italy (7.2%), Hungary (5.4%), and Romania (4.4%). Its main suppliers are China (12.1%), Germany (7.4%), Russia (7.5%), Italy (6.6%) and Hungary (5.6% - data Statistical Office of the Republic of Serbia 2022). Serbia is the largest Western Balkan trade partner of the European Union. Observed by regions, the largest share in export of Serbia was noted in Vojvodine (33.6%), followed by Beogradski (23.3%), Šumadije and Zapadne Srbije (21.0%), and Južne and Istočne Srbije (19.9%).
Serbia has a structural trade deficit that amounted to 7.8% of GDP in 2021, according to the World Bank. A large portion of the deficit is due to investment-related imports. Exports of merchandise stood at USD 25.5 billion (+31.1% y-o-y), against USD 33.8 billion in imports (+28.8% y-o-y). In the same year, Serbia exported USD 9.2 billion worth of services, importing USD 7.5 billion (data WTO). According to figures from the Serbian statistical office, in 2022 the country's exports grew by 12.4% to USD 29 billion, while imports went up by 20.4% to USD 41.1 billion. The deficit amounted to USD 12 billion, which was an increase of 44.9% in relation to the same period one year earlier.
| Foreign Trade Indicators | 2017 | 2018 | 2019 | 2020 | 2021 |
|---|---|---|---|---|---|
| Imports of Goods (million USD) | 21,947 | 25,882 | 26,730 | 26,233 | 33,797 |
| Exports of Goods (million USD) | 16,996 | 19,227 | 19,630 | 19,498 | 25,564 |
| Imports of Services (million USD) | 4,799 | 5,909 | 6,569 | 5,758 | 7,528 |
| Exports of Services (million USD) | 5,940 | 7,126 | 7,745 | 7,042 | 9,207 |
| Imports of Goods and Services (Annual % Change) | 11.1 | 10.8 | 10.7 | -3.6 | 17.7 |
| Exports of Goods and Services (Annual % Change) | 8.2 | 7.5 | 7.7 | -4.2 | 19.5 |
| Imports of Goods and Services (in % of GDP) | 57.1 | 59.1 | 60.9 | 56.5 | 62.3 |
| Exports of Goods and Services (in % of GDP) | 50.5 | 50.4 | 51.0 | 48.2 | 54.5 |
| Trade Balance (million USD) | -4,533 | -5,983 | -6,289 | -5,941 | -6,992 |
| Trade Balance (Including Service) (million USD) | -3,435 | -4,813 | -5,159 | -4,677 | -5,312 |
| Foreign Trade (in % of GDP) | 107.5 | 109.5 | 112.0 | 104.7 | 116.8 |
Source: WTO – World Trade Organisation ; World Bank , Latest Available Data
| Main Customers (% of Exports) |
2022 |
|---|---|
| Germany | 13.7% |
| Bosnia and Herzegovina | 7.5% |
| Italy | 7.2% |
| Hungary | 5.4% |
| Romania | 4.4% |
| See More Countries | 61.8% |
| Main Suppliers (% of Imports) |
2022 |
|---|---|
| China | 12.1% |
| Germany | 11.4% |
| Russia | 7.5% |
| Italy | 6.6% |
| Hungary | 5.6% |
| See More Countries | 56.7% |
Source: Comtrade, Latest Available Data
Source: Comtrade, Latest Available Data
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Source: United Nations Statistics Division, Latest Available Data
- Serbian Progressive Party (SNS): centre-right, right-wing populist, led by Aleksandar Vucic and head of the Together We Can Do Everything alliance
- Socialist Party of Serbia (SPS): left-wing, nationalist, populist, led by Ivica Dacic
- United Serbia (JS): conservatist, populism
- Social Democratic Party of Serbia (SDPS): social democracy, populism
- Party of United Pensioners of Serbia (PUPS): centre left, pensioners' interests
- United (Ujedinjeni): parliamentary group composed of parties that took part in the United for the Victory of Serbia (UZPS) coalition in the 2022 general election
- National Democratic Alternative (NADA): national-conservative political coalition, led by the New Democratic Party of Serbia (NDSS) and Movement for the Restoration of the Kingdom of Serbia (POKS)
- People's Party (Narodna): centre-right
- Democratic Party (DS): centre, social liberalism, pro-Europe
- Serbian Party Oathkeepers (SSZ): far-right
- Together (Z): left-wing
- Dveri: nationalism, right-wing populism
- Do not let Belgrade drown (NDB): green
- Alliance of Vojvodina Hungarians (VMSZ): represents the Hungarian minority in Serbia.
The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The UK Foreign travel advice also provides comprehensive travelling abroad advice for all countries, including the latest information on health, safety, security, entry requirements and travel warnings.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Serbian government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Serbia in the IMF’s Policy Tracker platform.
For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.
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Latest Update: September 2023
