Discusses key economic indicators and trade statistics, which countries are dominant in the market, and other issues that affect trade
Serbia is located in the heart of Southeast Europe (SEE), at the crossroads of Europe, Middle East, and Africa. The SEE region is home to emerging markets of varying size, all of which have economic development plans focused on bringing their legal, labor and tax codes; educational and medical systems; energy, transportation, and telecommunications infrastructures; and security/defense frameworks up to European standards. Combined, Bulgaria, Romania, Serbia, Croatia, Hungary, North Macedonia, Moldova, Montenegro, Bosnia and Herzegovina, and Slovenia represent a market the size of Texas, with 60 million inhabitants and a GDP of around USD500 billion.
With a population of 7 million, Serbia is the largest and most prosperous economy in the West Balkans, serving as a regional hub and springboard for companies to access the larger regional market. In 2019, Serbia achieved GDP growth of over 4 percent – reaching 6.1 percent growth in the 4th quarter, among the highest in the world – and the government is using its strong fiscal position to make aggressive investments into infrastructure and digitization. Prior to the COVID-19 crisis, Serbia was in a strong economic and fiscal position, with high growth and relatively low debt and inflation.
Serbia is in the gradual process of accession to the EU and receives substantial EU development funds. The EU, particularly Germany and Italy, remains the country’s biggest source of trade and investment. China, Turkey, and Russia are also highly active in Serbia, focusing on procurements, investments, continued trade liberalization, and infrastructure. Serbia is the fourth biggest recipient of Chinese investment in Europe, particularly in greenfield projects, and has discussed participation in China’s Belt & Road Initiative. U.S. firms have invested around $4 billion into Serbia and continue to play an active role in the Serbian economy.
U.S. exports of goods to Serbia total roughly $150 million. Primary exports include aviation parts and machines, pharmaceutical and medical products, as well as tobacco and optical instruments. U.S. imports from Serbia total $340 million. FIAT automobiles are a major U.S. import from Serbia, followed by tires, raspberries, and hunting rifles and ammunition.
Despite its relatively small size, Serbia’s emerging economy represents significant opportunities for exports and investments across a wide range of sectors, particularly infrastructure, ICT, healthcare, agribusiness, energy, and environmental technologies. While certain segments remain highly price sensitive, rising prosperity among business and government presents a window in which they can afford Western brands of high quality, to modernize and focus on purchases with the best return on investment. Key challenges remain in public procurement, bureaucratic burden, corruption, and inefficient commercial courts. However, the market is ripe for new U.S. products, which are viewed positively for their value, quality, and price.