Transcript SERBIA Economic Outlook

Nikolay Georgiev
Dushan Nedeljkovic
Outline
 Country Facts
 Trends of macroeconomic aggregates
 Economic activity Indicators
 Labor Market
 Trade
 FDI
 Monetary policy and Exchange Rate
 Wages
Country Facts
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Territory – 77474 sq km
Population – 7.4 million
Capital – Belgrade
Currency – Dinar (RSD)
Official Language – Serbian
Major Economic and Political
Reforms – 2000
 Natural resources – oil, gas,
coal, iron ore, copper, zinc,
gold, silver, magnesium,
limestone, marble, salt, arable
land
Trends of macroeconomic aggregates
 Average GDP growth for the period 2002-2008 is 6.1%
 Increase in aggregate demand
 High investment and Structural Reforms
 Higher productivity and increased efficiency due to
privatization
 Positive financial results of RSD 108 billion in 2006
 Still recovering from the slump in 1990s
Economic activity Indicators
Labor Market
 In the period 2001-2008 employment level falls
 Increase in the employment in the private sector but
downsizing of the Stated-owned enterprises
 Unemployment remained high (around 21%) but
decreases in 2007 and 2008 18.8% and 14.7%
respectively
Trade
 Major trade partners – Austria, Russia, Germany, Italy,
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Bosnia, Romania, Bulgaria
Main imports are fuel, capital goods and transport
equipment, main exports – manufacturing goods, food,
transport equipment, machinery
In the period 2001-2007 exports increased dramatically due
to increase of aggregate demand.
Imports grew even faster due to the same reason plus the
effect of the appreciation of the RSD
Trade deficit increase from 20.8% of the GDP in 2005 to
22.8% of the GDP in 2007
CA deficit also increased from 10.0% of the GDP in 2005 to
14.7% of the GDP in 2007
Foreign Direct Investment
 In the period 2005-2007 Serbia’s capital balance
increased significantly due to the great amount of FDI
– EUR 6.3 billions
 In 2008 – decrease in FDI
Monetary policy and Exchange Rate
 Due to the high inflation
the NBS had to impose
restrictive monetary
policy in the period 2005
- 2007
 The dinar euro XR
increased in real terms
by 20.5%
 As a result in 2008
inflation was 6.8%
Wages
 Average net wages grew in the period 2001 – 2008
reaching 32,746 RSD (EUR 347) in 2008.
 Wage growth, especially in the public sector, combined
with local currency appreciation, brought about to an
increase of unit costs of labor and lower
competitiveness of the economy.
•http://www.mfin.sr.gov.yu/
•http://www.mfin.sr.gov.yu/eng/2742/
•http://www.mfin.sr.gov.yu/eng/3041/
•http://www.nbs.rs/internet/english/30/index.html