Serbia Economy Profile 2013

Economy - overview

Serbia has a transitional economy mostly dominated by market forces, but the state sector remains large and many institutional reforms are needed. The economy relies on manufacturing and exports, driven largely by foreign investment. MILOSEVIC-era mismanagement of the economy, an extended period of international economic sanctions, civil war, and the damage to Yugoslavia's infrastructure and industry during the NATO airstrikes in 1999 left the economy only half the size it was in 1990. After the ousting of former Federal Yugoslav President MILOSEVIC in September 2000, the Democratic Opposition of Serbia (DOS) coalition government implemented stabilization measures and embarked on a market reform program. After renewing its membership in the IMF in December 2000, Serbia continued to reintegrate into the international community by rejoining the World Bank (IBRD) and the European Bank for Reconstruction and Development (EBRD). Serbia has made progress in trade liberalization and enterprise restructuring and privatization, but many large enterprises - including the power utilities, telecommunications company, natural gas company, national air carrier, and others - remain in state hands. Serbia has made some progress towards EU membership, signing a Stabilization and Association Agreement with Brussels in May 2008, and with full implementation of the Interim Trade Agreement with the EU in February 2010, gained candidate status in March 2012. Serbia is also pursuing membership in the World Trade Organization, and accession negotiations are at an advanced stage. Structural economic reforms needed to ensure the country's long-term prosperity have largely stalled since the onset of the global financial crisis. Serbia, however, is slowly recovering from the crisis. The economy slipped 0.5% in 2012, following growth of 2.0 % in 2011, 1.0% in 2010 and a 3.5% contraction in 2009. High unemployment and stagnant household incomes are ongoing political and economic problems. Serbia signed a new $1.3 billion Precautionary Stand By Arrangement with the IMF in September 2011 that was set to expire in March 2013, but the program was frozen in early 2012 because the 2012 budget approved by parliament deviates from the program parameters. Growing deficits constrain the use of stimulus efforts to revive the economy, while Serbia's concerns about inflation and exchange rate stability preclude the use of expansionary monetary policy. Serbia adopted a new long-term economic growth plan in 2010 that calls for a quadrupling of exports over ten years and heavy investments in basic infrastructure. Since the plan was adopted, Serbia has increased its exports significantly. Major challenges ahead include: high unemployment rates and the need for job creation; high government expenditures for salaries, pensions and unemployment benefits; a growing need for new government borrowing; rising public and private foreign debt; attracting new foreign direct investment; and getting the IMF program back on track. Other serious challenges include an inefficient judicial system, high levels of corruption, and an aging population. Factors favorable to Serbia's economic growth include a strategic location, a relatively inexpensive and skilled labor force, and free trade agreements with the EU, Russia, Turkey, and countries that are members of the Central European Free Trade agreement.

GDP (purchasing power parity)

$79.65 billion (2012 est.)
$80.04 billion (2011 est.)
$78.76 billion (2010 est.)
note: data are in 2012 US dollars

GDP (official exchange rate)

$37.2 billion (2012 est.)

GDP - real growth rate

-0.5% (2012 est.)
1.6% (2011 est.)
1% (2010 est.)

GDP - per capita (PPP)

$10,500 (2012 est.)
$10,600 (2011 est.)
$10,500 (2010 est.)
note: data are in 2012 US dollars

GDP - composition by sector

agriculture: 10.6%
industry: 18.6%
services: 70.8% (2012 est.)

Population below poverty line

9.2% (2010 est.)

Labor force

3.17 million (2012 est.)

Labor force - by occupation

agriculture: 21.9%
industry: 19.5%
services: 58.6% (2010)

Unemployment rate

25.9% (2012 est.)
23.7% (2011 est.)

Unemployment, youth ages 15-24

total: 42.5% (2009)

Distribution of family income - Gini index

28.2 (2008)
30 (2003)

Investment (gross fixed)

18.4% of GDP (2012 est.)

Budget

revenues: $15.24 billion
expenditures: $17.75 billion (2012 est.)

Taxes and other revenues

41% of GDP (2012 est.)

Budget surplus (+) or deficit (-)

-6.7% of GDP (2012 est.)

Public debt

60% of GDP (2012 est.)
45.1% of GDP (2011 est.)
note: data cover general government debt, and includes debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities; the data include debt issued by subnational entities, as well as intra-governmental debt; intra-governmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care, and unemployment. Debt instruments for the social funds are not sold at public auctions.

Inflation rate (consumer prices)

6.2% (2012 est.)
11.2% (2011 est.)

Central bank discount rate

9.75% (15 December 2011)
12% (17 January 2011)

Commercial bank prime lending rate

15% (31 December 2012 est.)
17.2% (31 December 2011 est.)

Stock of narrow money

$5.783 billion (31 December 2011 est.)
$5.002 billion (31 December 2010 est.)

Stock of money

$3.69 billion (31 December 2009)
$3.831 billion (31 December 2008)

Stock of quasi money

$14.11 billion (31 December 2009)
$11.95 billion (31 December 2008)

Stock of broad money

$17.31 billion (31 December 2012 est.)
$18.55 billion (31 December 2011 est.)

Stock of domestic credit

$19.8 billion (31 December 2012 est.)
$21.43 billion (31 December 2011 est.)

Market value of publicly traded shares

$8.365 billion (31 December 2011)
$9.69 billion (31 December 2010)
$11.52 billion (31 December 2009)

Agriculture - products

wheat, maize, sugar beets, sunflower, raspberries; beef, pork, milk

Industries

base metals, furniture, food processing, machinery, chemicals, sugar, tires, clothes, pharmaceuticals

Industrial production growth rate

2.1% (2011 est.)

Current Account Balance

-$4.336 billion (2012 est.)
-$4.122 billion (2011 est.)

Exports

$12.25 billion (2012 est.)
$11.78 billion (2011 est.)

Exports - commodities

iron and steel, rubber, clothes, wheat, fruit and vegetables, nonferrous metals, electric appliances, metal products, weapons and ammunition

Imports

$20.42 billion (2012 est.)
$19.45 billion (2011 est.)

Reserves of foreign exchange and gold

$16.2 billion (31 December 2012 est.)
$15.6 billion (31 December 2011 est.)

Debt - external

$32.6 billion (31 December 2012 est.)
$31.53 billion (31 December 2011 est.)

Stock of direct foreign investment - at home

$27 billion (31 December 2009 est.)
$11.95 billion (2006 est.)

Stock of direct foreign investment - abroad

$NA

Exchange rates

Serbian dinars (RSD) per US dollar -
90.35 (2012 est.)
72.455 (2011 est.)
77.729 (2010 est.)
67.634 (2009)
62.9 (2008)