Current economic situation in Serbia?

Apart from heavy losses of lives during pandemic (18% more than in other countries), it seems that Serbia had a very small recession in 2020 and good growth especially in 2021 and the Serbian economy started to show signs of recovery (Source: World Bank review).

There were high hopes for 2022 and then the “special military operation” started in Ukraine. Forecast of GDP growth went down from a previously forecasted 4,4% and later (re)projected to slow to 3,2% in 2022.

Inflation rise is officially declared 7,9%, while prices of basic consumption articles such as food and communal services are likely to accelerate further, following increases in global food and energy prices. Serbian Statistics office informed that the unemployment rate in Serbia increased to 10,6% in the first quarter of 2022 from 9,8% in the fourth quarter of 2021.

IT services are growing, especially with resettlement of IT experts from the Russian Federation and from Ukraine. It is important to emphasize that a need for artisans of any profile is still high. 

Investment climate in Serbia

According to the US Department of State report about Serbia: “The Serbian government has identified eco­no­mic growth and job creation as top priorities and has committed to resolving several long-standing issues rela­ted to consolidating market-driven capitalism. The government has passed significant reforms to labour law, construction permitting, inspections, public procurement, and privatization that have helped improve the busi­ness environment. Companies and officials have noted that the adoption of reforms has sometimes outpaced thorough implementation of these reforms. Digitizing certain functions (e.g., construction permitting, tax ad­mi­nis­tration, e-signatures, and removing the previously ubiquitous requirement for ink stamps) has not yet brought a dramatic improvement in processing times and may not be consistently implemented. If the government delivers on promised reforms during its EU accession process, business opportunities will likely continue to grow in the coming years. Sectors that stand to benefit include agriculture and agro-pro­cessing, solid waste management, sewage, environmental protection, information and communications techno­logy (ICT), renewable energy, health care, mining, and manufacturing.”

Potentials for Serbia

Serbia is harmonizing its legislation with the EU legislation. In 2021 no new Chapters were open and that will be the same in 2022. Plans made by Serbian government for Serbia to become a member of the EU by 2025 while still maintaining strong ties with Russia and China seem to have failed when the first news about conflict in Ukraine popped up.

Another plan is growing slow but steadily and that is the chance for Serbia: creation of the so-called Open Balkan and the zone of free trade between former Yugoslav Republics (which are still not in the EU) plus Albania. Serbia is expected to develop towards the EU, even though in this moment the membership looks like far away.