One of the fundamental trends on the CEE telecoms market is provision of telecoms services in packages.
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"From the beginning of the project, PMR was a professional partner who listened to our needs and catered their proposals according to our needs, their strengths and our budgetary constraints. [...]"
Director of Sourcing, Global marketer of consumer and commercial products
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We are a member of the Strategic and Competitive Intelligence Professionals (SCIP)
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We are a member of the European Association of Opinion and Marketing Research Professionals ESOMAR.
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| Why to enter this market? |
- Committed to becoming an EU candidate
- Introducing reforms to harmonise its legal environment with that of the EU
- Largest former Yugoslav country
- Industrial traditions
- Favourable geographical location between EU and Middle East
- Educated workforce
- Relatively low employment costs
- Strong links with Western economies even during communist era
- Increasing number of university graduates
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Business and economic environment
Serbia, formerly a prominent part of Yugoslavia, is now returning to the European economy after a protracted period of communism under Milosevic. Prior to the dissolution of Yugoslavia, it had a well developed industry (by CEE standards), but war with its neighbours, the collapse of the Soviet Union and years of economic sanctions have reduced its economic potential. After an election in 2008, Serbia seems to be committed to entering the EU and has even started to co-operate in the prosecution of 1990s war crimes, for example sending Radovan Karadzic (a former Bosnian Serb leader) to The Hague. Serbia is now in the process of harmonising its legal standards with those of the European Union and still has relatively low labour costs and an educated workforce. The key areas of the economy which might be considered appropriate targets for investment include agriculture, the car industry, aviation, construction, energy, mining, ICT, the pharmaceutical industry, textiles and clothing and wood and furniture. Serbia has a developed infrastructure and even during the communist era it was already well connected with the economies of Western Europe. In addition to various investment incentives, the country has introduced a flat corporate income tax rate of 10%. However, it must be said, that political and currency risk still exists and must be taken into account when planning market entry.
The estimated GDP of Serbia for 2011 is EUR 31bn, or EUR 4,200 per capita. The economy developed by 5.4% per annum on average between 2000 and 2008, but entered recession in 2009, when it shrank by 3%. However, growth picked up at a rate of 1.5% in 2010 and is expected to fluctuate around 3% in 2011 and to return to 5% or more in the medium term (2012-2015). However, it should be noted that a much more serious problem faced by the Serbian economy is the very substantial current account deficit, which peaked at EUR 6 bn (18% of GDP) in 2008 but has been reduced to less than 10% of GDP in the past two years. The most important subdivisions of the Serbian economy are mining and manufacturing.
Serbia is reported to attract one of the most substantial levels of FDI and the most substantial greenfield investments in the region. Since 2001, total FDI in Serbia has reached EUR 11bn. This is, in part, a reflection of the late opening of the country to Western investors after the collapse of the Milosevic regime, but also of the strong industrial development of the former Yugoslavia, and its ties with Western companies during this period.
The unemployment rate was 17.4% in Serbia in 2009, a relatively high level which is common among the former Yugoslav states because of the huge black market and structural problems in the economy. The number of unemployed Serbs fell constantly between 2006 and 2009, with unemployment rates of 21.6% in 2006 and 14% in 2008.
The inflation rate, which peaked at 11.7% in 2008, fell again, to 6.8% in 2010 and is expected to level out at 4% between 2012 and 2015.
Social environment
Serbia has a population of approximately 7.3 m, and Serbs are the dominant nationality. However there are also minorities, including Hungarians, Bosnians, Roma, Croats, Czechs, Slovaks, Macedonians, Bulgarians and Romanians. The northern province of Vojvodina, in particular, is ethnically and religiously diverse.
Serbia is considered to be one of the most diverse countries on the continent. For example, in the province of Kosovo, 90% are Muslim, in the Vojvodina province a substantial percentage are Catholic or Protestant, whereas in the Central Serbia and Belgrade regions the vast majority are Christian Orthodox.
The villages and mountains are the main sightseeing attractions in Serbia, and tourism, with famous mountain resorts such as Zlatibor, Kopaonik and Tara, is becoming increasingly prominent in the economy. Large cities such as Belgrade, Novi Sad and Nis, and the rural areas of Serbia have become more popular among tourists, 2.2 million of whom visited Serbia in 2007, a 15% increase in comparison with 2006.
Over 230,000 students study at seven public and seven private universities in Serbia. The literacy rate among the Serbian population is 98%, according to UNDP data.
Infrastructure and technological environment
The rail network dominates infrastructure in Serbia. This was 3,297 km long in 2009, and the road network, including 560 km of motorways and expressways, was 36,884 km long during the same year. There were also 3,106,000 main telephone lines, but mobile phones were also very popular – with over 9.9mn users.
90% of households in Serbia have fixed telephone lines, 61% of households have computers, 57% use the internet, and 42% have cable TV. The most modern mode of communication - the internet - had 4.1mn users in 2009, and there were over 0.5 million internet hosts registered in 2009.
Political environment
On 21 May, 2006, the Republic of Montenegro held a referendum on independence and declared itself independent on 3 June. The Serbian parliament subsequently changed the name of the country from Serbia and Montenegro to the Republic of Serbia, with Serbia retaining Serbia and Montenegro’s membership of all international organisations and bodies.
On 17 February 2008, the Kosovo Assembly declared the province independent. This has been recognised and acknowledged by more than 50 countries around the world.
The Republic of Serbia is a parliamentary democracy: the Prime Minister is the head of government and of a multi-party system. Executive power is held by the government. Legislative power is vested in both the government and the National Assembly of Serbia, to which 250 members are elected for a four-year term. The Judiciary is independent of the executive and legislative systems.
Political stability in Serbia is likely to improve after a split among the Radicals in parliament, with 17 MPs forming a new parliamentary grouping led by former deputy leader Tomislav Nikolic. This is promising in terms of better co-operation with The Hague Tribunal and of Serbia’s achieving candidate country status. At the moment Serbia is a non-EU country with accession plans but no candidacy.
General data
Area: 77,474 m2
Population: 7.3m (2010)
Capital: Belgrade
Languages: Serbian 95%, Albanian 5%
Ethnic groups: Serbs 82.9%, Hungarians 3.9%, Roma (Gypsy) 1.4%, Yugoslavs 1.1%, Bosnians 1.8%, Montenegrin 0.9%, others 8% (2002 census)
National boundaries: Hungary 151 km, Romania 476 km, Bulgaria 318 km, Macedonia 62 km, Kosovo 352 km, Montenegro 124 km, Bosnia and Herzegovina 302 km, Croatia 241 km
Major economic indicators
| |
2007 |
2008 |
2009 |
2010 |
2011f |
| GDP (EUR bn) |
29.1 |
33.5 |
29.5 |
29.9 |
30.8 |
| Population (m) |
7.4 |
7.4 |
7.4 |
7.3 |
7.3 |
| GDP per capita (EUR) |
3946 |
4552 |
4003 |
4096 |
4220 |
| GDP (constant prices y-o-y %) |
7.1 |
5.5 |
-3 |
1.5 |
3 |
| CPI (average, y-o-y %) |
6.5 |
11.7 |
6.6 |
6.8 |
5 |
| Central bank reference rate |
10 |
17.75 |
20 |
17.5 |
12 |
| Monthly wage, nominal (EUR) |
484 |
561 |
493 |
491 |
|
| Unemployment rate (%) |
18.8 |
14.7 |
17.4 |
19.2 |
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| Net FDI (EUR bn) |
1.8 |
1.9 |
1.1 |
1.3 |
|
| FDI % GDP |
6.3 |
5.6 |
3.7 |
4.4 |
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| FX reserves (EUR bn) |
9.6 |
8.2 |
8 |
8.0 |
8.0 |
| FX reserves |
54.2 |
37.4 |
35.2 |
32.3 |
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| Exchange rate to USD AVG |
58.34 |
55.4 |
55.40 |
79.97 |
78.71 |
| Exchange rate to EUR AVG |
79.98 |
81.49 |
97.58 |
104.71 |
103.6 |
Last update: Q1 2011
Useful data
Currency: In Serbia, the Serbian dinar (RSD) is legal tender, but the euro (EUR) is the de facto currency.
Exchange rate (23.03.2011): RSD 1 = EUR 0.0096
Time zone: GMT +1
Area code: +381
If you would like to find out more on the Serbian market opportunities please do not hesitate to contact us directly:
tel. (48 12) 292 22 50
fax (48 12) 292 22 99
e-mail: info@pmrconsulting.com
PMR Business Solutions in Serbia
Market reports Serbia
To purchase or find detailed information on PMR Publications reports covering the general economy, construction, retail, pharmaceutical, and ICT sectors in Serbia.
If you are looking for greater detail trust our research and consulting divisions to carry out projects tailored to your business needs.
Consulting in Serbia
PMR Consulting offers a wide range of consulting services in Central and Eastern Europe for foreign companies interested in the region. The typical projects include: competitive intelligence, sourcing, strategic advisory, consulting at foreign direct investments and mergers & acquisitions.
Market research in Serbia
PMR Research offers a full array of qualitative and quantitative research methodologies, providing services such as customer satisfaction studies, brand awareness and brand image research, distribution and competition studies, segmentation and sector analyses.
Case studies for Serbia and Montenegro
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