Serbia 

Serbia country policy

Policy established 21 April 2010

• ILC, bank guarantee or central public guarantee (unconditional)
• The country ceiling is 1000 mln euro
• Early warning signal 100 mln euro
• - of which was used as at 2012-02-29 43 mln euro

Country class: 6

Serbia country facts

Atradius Dutch State Business Economic Research 
Country Report last updated : 7 September 2011
Country :  SERBIA  

 
Political Situation
Less Unstable

Head of state
President Boris Tadic (DS).

Form of government
Coalition led by For a European Serbia (ZES), composing the Democratic Party (DS), Socialist Party (SPS) and smaller parties/independent members, headed by p.m. Mirko Cvetkovic.
 
Internal Economic Situation
Weak Recovery From Recession

General situation
The Serb economy has shown a strong performance since 2000 (>6% p.a.) but on a low level of transition; buoyant domestic demand was boosted by excessive bank lending, higher wages and inflow of private transfers from abroad. In 2009 the economy was badly hit by the global recession, only followed by weak recovery as domestic demand has remained depressed. Gradual disinflation from the peak in 2011Q1: 12.6% p.a. Solid banking sector with strong liquidity and capital-adequacy ratio’s that withstand the high level of NPL’s; the 10 largest foreign parent banks with 75% of the sector’s balance sheets have reaffirmed their commitments to Serbian subsidiairies. A large shadow economy compensates for high official unemployment (>15%). Rather poor TI-corruption index (78th out of 178); weak judicial system. 
 
External Economic Situation
Weak Solvency

Main sources of foreign exchange
Industrial products, private transfers.

Main foreign markets
EU (55%), esp. Romania, Bulgaria and Italy.

Main expenses of foreign exchange
Machinery (18%), manufactured goods (18%), fuel (18%).

 
B alance of payments 
Weak export structure with high portion of low-value added goods. Moderate recovery of exports and imports after the low in 2009. The dinar is subject to nervousness on the financial markets: short periods of appreciation are followed by a marked depreciation, even triggering occasional NBS-interventions to prop up the exchange rate.