SERBIA AS AN INVESTMENT DESTINATION
In a nutshell, Serbia is an attractive investment destination for several reasons.
- Politics - early parliamentary elections held on 24th April 2016 resulted in the ruling Serbian Progressive Party winning absolute majority in the National Assembly commanding 131 out of 250 seats. That will continue with political stability and certainty for the period of 4 years.
- Credit rating - Standard and Poor’s BB- with positive outlook, Fitch BB- with stable outlook, Moody’s Ba3 with stable outlook
- Economic performance – The projected GDP for 2016 was 1.75%, but the GDP vent up to 2.7%. The
projected GDP growth for 2017 is 3%.
In 2016 retail sales in Serbia grew by 7.4% in current prices, and 7.5% in constant prices. Compared to December 2015, the sales grew by 9.0% in current prices, and 6.8% in permanent prices. In December 2016, industrial production recorded a 3.9% hike relative to the same month in 2015, while the industrial production in processing industry grew by 8.2%. Mining production recorded a 3.1% decline, while the power, gas, steam and HVAC supply also fell by 6.3%.
The value of Serbia’s foreign trade in 2016 amounted to $34.14 billion in 2016, which is an 8.1% growth y-o-y compared to 2015, while, expressed in Euros, it stood at 30.82 billion which is an 8.4% hike. Serbia exported a total of $14.88 billion worth of goods and services (an 11.2% growth), and imported $19.26 billion (a 5.7% growth compared to 2015). The export to import ratio stood at 77.3%, compared to 73.5% in 2015. Serbia mainly exported to Italy, Germany, Bosnia and Herzegovina, Romania and the Russian Federation, while Germany, Italy, China, Russia and Hungary were the country’s main import partners.
According to the EY Europe Attractiveness Survey 2016, published at the beginning of June 2016, Serbia is a one of the Top 10 countries by FDI job creation. Also, with + 108% of percentage change, Serbia is the second economy in terms of growth of FDI job creation.
- EU membership - Serbia was granted the EU candidacy member in December 2011. Serbia is continuing with EU accession with opening EU accession chapters every few months.
- As the EU pre-accession country,
- Assets are relatively cheap to purchase,
- Low cost labour and other operating expenses are lower than in EU
- Low corporate tax of 15%.
- Direct – grants and subsidies from the government up to 80% of the costs of the new investment based on the creation of new jobs, location and other criteria
- Indirect – tax and customs duties relieves and incentives for foreign investors
- Chinese HBIS Group Co., Ltd acquired Smederevo Steel Mill
- the US investment fund KKR, having invested US$1.2 billion in cable and media operator SBB, is considering further investments,
- Hyprop Investments/Homestead /Group Holdings purchased of one of the local shopping malls for €127.7 million,
- Bosh, Fiat, Yura, NEC, STADA Group just few household names–investors in the Serbian companies.
20th March 2017.