|GDP, current US$ billion||53|
|GDP per capita, current US$||7,673|
|School Enrollment, primary (% gross, 2019)||99.6|
|Life Expectancy at Birth, years (2018)||75.9|
After robust growth of 4.2 percent in 2019, the COVID-19 pandemic caused a recession of -1 percent in 2020. This is a significantly better result than what was previously projected (a drop of 3 percent). Services sectors were hit the most by the pandemic-related events (down 1.5 percent, year-on-year), while value added in industry remained flat in real terms and the agriculture sector grew by 4.9 percent. On the expenditure side, both investment and consumption had a negative contribution to growth in 2020 (-1.1 and -0.7 percentage points, respectively), while net exports had a positive contribution (0.8 percentage points).
The large fiscal stimulus program of close to 13 percent of GDP helped to keep the recession mild. It consisted of tax deferrals, increased expenditures of around 8 percent of GDP, and guarantees in the amount of 4.8 percent of GDP. As the largest part of the package (7.4 percent of GDP) went to businesses, a major reduction in employment was avoided. In fact, registered employment increased by 1.9 percent compared to 2019. The third quarter unemployment rate, as measured by the Labor Force Survey, stood at 9 percent in 2020, slightly lower than 2019. The wage subsidy and cash support to citizens also helped to avert a spike in poverty, although at a significant fiscal cost. Due to the support package, limited labor market impacts, and growth in agriculture, poverty (income under US$5.5/day in revised 2011 purchasing power parity) is estimated to have remained nearly stagnant at 17.4 percent in 2020 compared to 17.3 percent in 2019.
The fiscal deficit increased significantly in 2020 and reached an estimated 8.1 percent of GDP, primarily due to the large fiscal stimulus program. Public debt is estimated to be 58.2 percent of GDP at end-2020.
The new government formed in October 2020 (following June 2020 elections) continues to implement programs that address structural weaknesses, increase public sector efficiency, and eliminate bottlenecks to private sector growth, along with maintaining macroeconomic stability. An important aspect will be the introduction of a “green growth” program to its post-COVID-19 economic recovery efforts while responding to challenges that include a shrinking population, labor shortages, and climate change. Serbia’s continued growth will crucially depend on the pace of the European Union (EU) accession process.
Last Updated: Apr 07, 2021