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  • August 2017

    Monthly Update Politics

    The European Parliaments (EP) rapporteur for Serbia, David McAllister, met with Serbian President Aleksandar Vucic on August 25th, local media reported. During the meeting, President Aleksandar Vucic and McAllister discussed Serbias EU path, its all-nation dialogue on Kosovo, and progress

    in talks with Pristina, according to a statement from Presidents office.

    Prime ministers of the Western Balkans 6 Serbia, Albania, Macedonia, Montenegro, Bosnia-Herzegovina, and Kosovo agreed at an informal summit in the Albanian port city of Durres on August 23rd to name coordinators from the ranks of their aides within two to three weeks to work together with the chambers of commerce in the region to implement regional cooperation action plans, local media reported, quoting Serbian Prime

    Minister Ana Brnabic.

    Serbian Prime Minister Ana Brnabic met with US Vice President Mike Pence on the sidelines of the Adriatic Charter Summit on August 3rd in Podgorica, Montenegro, local media reported. During the meeting, Brnabic said that Serbian President Aleksandar Vucics recent visit to Washington,

    D.C. gave an impetus to a further development of the two countries relations, noting that an improvement of overall relations with the US is one of

    Serbias foreign policy priorities, according to a statement on the Serbian governments website.

    European Integration Minister Jadranka Joksimovic has said that she expects Serbia will open three more chapters of EU accession talks by the end of the year chapter 6, which deals with company law, chapter 33, which deals with financial and budgetary provisions, and chapter 30, which deals with external relations and concerns commercial commitments, local media reported.

    Fiscal Sector

    In July 2017, public debt of the Republic of Serbia changed from RSD 2,887.7bn (EUR 23.9bn) at the end of June 2017, to RSD 2,867.8bn (EUR 23.8bn) at the end of July 2017. Central Government public debt to GDP (ESA 2010 methodology) ratio was at the level of 65.2% at the end of July

    2017. The major share of public debt is still in foreign currency out of which in EUR is 41.2%, USD 31.5%, RSD 22.0%, SDR 3.5%, CHF 0.5% and

    other 1.3% (GBP, JPY, DKK, SEC, NOK). In the first seven months of 2017, Public Debt Administration of the Republic of Serbia managed to meet its obligations which amounted to RSD 385.8n (EUR 3.2bn), out of which principal payments amounted to RSD 305.3bn (EUR 2.5bn), while interest

    and other costs were RSD 80.5bn (EUR 669mln). Vast majority of items repaid in the first seven months of 2017 belong to government securities

    issued on domestic market RSD 273.5bn (EUR 2.3bn) out of which principal payments were RSD 224.5bn1 (EUR 1.9bn) and interest payments were RSD 49.0bn2 (EUR 407mln). Obligations in respect of foreign creditors were repaid in amount of RSD 83.5bn (EUR 694mln), out of which principal

    RSD 54.0bn (EUR 449mln). Payments in respect of guarantees issued by the Government were RSD 20.5bn (EUR 170mln) out of which principal

    RSD 18.9bn (EUR 157mln), while interest were RSD 1.6bn (EUR 13mln). In the first seven months of 2017, PDA received RSD 243.4bn (EUR 2.0bn) from domestic market out of which government securities issued in domestic currency amounted to RSD 137.6bn (EUR 1.1bn) while receiving from

    EUR denominated government securities was RSD 105.8bn (EUR 879mln).

    Serbias state budget recorded a surplus of around RSD 33.2bn (EUR 274.7mln) in the first six months of 2017, the Ministry of Finance has said in a statement, citing preliminary data. In the first six months, Serbias state budget recorded revenues of RSD 549bn (EUR 4.5bn), while outlays were

    RSD 515.8bn (EUR 4.3bn), according to the preliminary data.


    The Executive Board of the International Monetary Fund (IMF) successfully completed the seventh review of Serbias economic performance under the Stand-By Arrangement (SBA), as communicated by IMF. IMF Executive Board ascertained that Serbia's business environment has strengthened

    but further progress on implementing the structural reform agenda is needed, especially in areas of modernizing education, strengthening tax administration, and restructuring of state-owned enterprises and utilities, the Ministry of Finance reported on its website.

    Serbia ranked first in the world in terms of jobs created relative to population size in 2016, according to the US-based IBM Global Business Services latest annual Global Location Trends report, local media reported.

    Investment bank JP Morgan has included a dinar-denominated security in the list of securities it plans to trade in, recommending it to investors, National Bank of Serbia (NBS) Governor Jorgovanka Tabakovic said to the local media. JP Morgan itself bought a dinar security for the first time on August 11th 2017.

    he National Bank of Serbias (NBS) net foreign exchange reserves have never been higher, NBS Governor Jorgovanka Tabakovic said at a session of the parliaments finance committee, as the local media reported. The NBS net forex reserves stood at EUR 8.4 billion in 2016, up from EUR 5.9

    billion in 2008. Gross forex reserves are even higher, as they include EUR 1.8 billion in banks reserve requirements. She also noted that year-on-year

    inflation remains low and stable four years on.

    Serbias GDP expanded 1.3% year-on-year in real terms in the second quarter of 2017, according to a flash estimate by the Statistics Office. According to an earlier news release from the Statistics Office, Serbias GDP expanded 1.2% year-on-year in real terms in Q1.

    Foreign Direct Investments

    Serbia ranks first in a global performance index for greenfield foreign direct investment (FDI) for 2016, prepared by FDI Intelligence, a division of the

    Financial Times (FT), the FT has reported. The index measures the appeal of countries as destinations for greenfield FDI relative to the size of their

    GDP. Serbia scored 12.02 in the index, thanks to regulatory reform, low labor costs, and access to the EU single market.

    The government is in talks with a large number of companies, including those from China, but also Russia and Canada, in an effort to find a partner for state copper mining and smelting company Rudarsko-Topionicarski Basen (RTB) in Bor, one capable of investing up to EUR 1 billion over the next

    several years, according to Mining and Energy Minister Aleksandar Antic, local media reported.

    Teklas Automotive, owned by Turkish automotive components producer Teklas Kaucuk, will held a groundbreaking ceremony for its new production facility in Vladicin Han this month, in attendance of Serbian President Aleksandar Vucic, local media reported. In early April 2016, Teklas Automotive unveiled a plant for the production of fluid circulation systems in the southern Serbian town. The Turkish company plans to create at least 1,200 jobs

    and reach sales of EUR 100 million.

    1 Repayments based on Frozen Foreign Currency Bonds are not included in this amount 2 The difference between nominal value and discounted value is included in this amount

  • August 2017

    Macroeconomic Data Real GDP growth % Industrial



    July16 in %

    CPI Current acc.

    Balance*** Government bonds on international

    market YTM as of 31st July 2017 Currency units/USD



    2015 2016 2017* July17/


    in %



    in %

    June17 last12



    % of










    31 July


    31 July


    31 July


    31 July


    0.8 2.8 3.0 4.2 -0.4 3.2 -1,702.6 -4.78 1.502% 2.235% 2.874% 3.088% 102.5828 111.2196 120.4014 123.2647 * Estimated value

    According to the data of the Serbian Statistical Office, consumer prices fell by 0.4% in July. A monthly decrease

    in prices was mostly on account of reduced prices of vegetables, fruit and petroleum products. On the other hand,

    the price increase was dominantly affected by the seasonal growth in prices of travel packages and cigarettes. Y -o-

    y inflation continued to move within the target tolerance band and fell to 3.2% in July. The rise in core inflation

    (consumer price index excluding food, energy, al cohol and cigaret tes) also slowed down and equaled 1.7% y-o-y

    in July. The factors affecting inflation movements and NBS expectations for the coming period will be more

    elaborated at the presentation of the Inflation Report scheduled for 16 August 2017.

    The overall external trade in the Republic of Serbia for the period January July 2017 amounted to:

    - USD 21,704.0 million - which was an increase of 10.6% compared to the same period 2016;

    - EUR 19,890.5 million - which was an increase of 13.1% compared to the same period 2016.

    The value of exports amounted to USD 9,491.9 million, which was 10.7% increase when compared to the same

    period last year, while the value of imports amounted to USD 12,212.1 million, which was 10.6% increase relative

    to the same period last year. Expressed in Euros, the value of exports amounted to EUR 8,698.3 million, which was

    the increase of 13.2%, co


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