Serbia is located in the heart of Southeast Europe (SEE) – which is at the crossroads of Europe, the Middle East, and Africa. In this region, there are a number of emerging markets of varying sizes, all of which have economic development plans focusing on bringing their laws, educational and medical systems, infrastructures, and security/defense frameworks up to European standards.
In terms of market opportunity, Serbia combined with Bulgaria, Romania, Croatia, Hungary, North Macedonia, Moldova, Montenegro, Bosnia and Herzegovina, and Slovenia represent a market the size of Texas, with 60 million inhabitants and a GDP of around $500 billion.
Despite its relatively small size, Serbia’s emerging economy creates significant opportunities for exports and investments across a wide range of sectors, particularly infrastructure, ICT, healthcare, agribusiness, energy, and environmental technologies.
Serbia is the largest and most prosperous economy in the Western Balkans, serving as a regional hub and springboard for companies to access the larger regional market.
The economy of Serbia is a service-based, upper middle economy, which functions on the principals of the free market. The strongest sectors of Serbia’s economy are energy, manufacturing (most popular in the automotive and machinery industries), mining, and agriculture.
Trade plays a major role in Serbian economic output, with its main trading partners being Germany, Italy, Russia, China, and the neighboring Balkan countries. The country’s leading trade exports are automobiles, base metals, furniture, food processing, machinery, chemicals, sugar, tires, clothes, and pharmaceuticals.
Neighboring Balkan countries are highly active in Serbia, focusing on procurements, investments, trade liberalization, and infrastructure. Serbia is also Europe’s fourth-biggest recipient of Chinese investment, particularly in greenfield projects, and participates in China’s Belt & Road Initiative. U.S. firms have invested around $4 billion into Serbia and continue to play an active role in the Serbian economy.
Certain segments of the Serbian economy remain highly price-sensitive, but rising prosperity among business and government presents a window in which they can afford Western brands of high quality, to modernize and focus on purchases with the best return on investment. Key challenges remain in public procurement, bureaucratic burden, corruption, and inefficient commercial courts.
In Serbia, SMEs have a considerable impact on the country’s economy. SMEs currently make up 99.8% of the number of businesses in the country. They generate about 2/3 of employment, a turnover of 54.1% of GDP and account for 43.2% of total exports.
80% of the total workforce in Serbia works in the SME sector. Concerning market innovation, 83% of Serbian entrepreneurs are highly educated, 97% of them implemented some kind of innovation in their business.
SMEs businesses are primarily in the sectors of agribusiness, production, and IT.