International Information Centre for Balkan Studies

Serbian central bank keeps key policy

June 10, 2021

The National Bank of Serbia said on Thursday that it would keep its key policy rate at the level of one percent.

The decision not to change the key policy rate was taken by the NBS Executive Board which said in a press release that earlier monetary and fiscal measures can be expected to continue to have a favorable effect on finances. It noted the strong growth of the GDP this year and the fact that the GDP grew by 1.7 percent in the first quarter which is more than the projected 1.2 percent, helped mainly by the construction industry, fixed investments and net exports.

According to the NBS, low base inflation of 1.8 percent shows that there is no significant inflationary pressure and that inflation is expected to be stable around current levels in future. The low and stable inflation was helped by the relative stability of the exchange rate, it added.

Source:  https://rs.n1info.com/english/news/serbian-central-bank-keeps-key-policy-rate-unchanged-3/

MAT: April prices in Serbia highest in four years

June 7, 2021

Compared to the same month in 2020, economic activity in Serbia in April accelerated, but so did inflation, which was 1.1 percent, with the growth of current consumer prices the highest since 2017, the monthly Macroeconomic Analysis (MAT) said on Monday.

The April inflation in Serbia amounted to 2.8 percent year on year and approached the National Bank of Serbia (NBS) goal of three percent, below which it has been since May 2019.

„The growth of inflation in April was mostly due to the increase in the price of fresh vegetables by 18.5 percent, and all products from the consumer basket, food by 2.6 percent, energy cost due to the increase in the price of motor fuel by 0.6 percent and the hike of rental prices,“ MAT said.

In March this year, Serbia had lower year-on-year inflation than nine and in April than six European Union member states, MAT said.

In the same month, it added, The Netherlands had higher year-on-year inflation than Serbia (1.9 percent), Germany (2), Austria (2), Sweden (2.1), the Czech Republic (2.3), Luxembourg (2.5) and Romania. 2.5), Hungary (3.9) and Poland (4.4).

In April, The Netherlands, Germany and Austria reportedly joined EU countries with lower inflation than Serbia.

The EU countries with the April inflation higher than Serbia included Romania (2.7 percent), Sweden (2.8), the Czech Republic (3.1), Luxembourg (3.3), Poland (5.1) and Hungary (5.2).

Source:  https://rs.n1info.com/english/news/mat-april-prices-in-serbia-highest-in-four-years/

Hungarian FM Szijjarto: 115 million for investments with Serbian companies

June 4, 2021

Foreign Affairs and Trade Minister Péter Szijjártó said on Friday that the Hungarian ExIm Bank would secure 115 million Euro to finance cooperation between companies in Hungary and Serbia.

He told the opening of the Serbia-Hungary Business Forum at the Serbian Chamber of Commerce (PKS) that the loans would be made available for business ventures in the two countries and on third markets, adding that Hungarian companies are always interested in Serbia and never made a bad investment. He said that Hungarian companies rank 11th on the list of foreign investors in Serbia with the OTP Bank holding the second largest market share.

Source:  https://rs.n1info.com/english/news/hungarian-fm-szijjarto-115-million-for-investments-with-serbian-companies/

Serbian software company sold for 300 million Dollars

June 2, 2021

A Serbian software developer company has been sold for more than 300 million Dollars, Business Wire reported.

The report quoted a press release from Take-Two Interactive Software which said that it acquired Belgrade-based Nordeus for $225 million in cash and $90 million in newly issued shares of Take-Two common stock with the Nordeus founding team continuing to run the company.

“Founded in 2010, Nordeus is a mobile games company based in Belgrade, Serbia, best known for Top Eleven, the world’s most successful mobile soccer management game with over 240 million registered users,” the press release said it and quoted Michael Worosz, Executive Vice President and Head of Strategy and Independent Publishing for Take-Two, as saying that the “investment in Nordeus strengthens Take-Two’s mobile game business, is highly complementary to Social Point and Playdots, and broadens our sports portfolio with our first-ever soccer offerings.

Source:  https://rs.n1info.com/english/news/serbian-software-company-sold-for-300-million-dollars/

FinMin says Serbia has one of greatest growth rates in Europe

May 31, 2021

Finance Minister Sinisa Mali claimed on Monday that Serbia had achieved one of the highest GDP growth rate in Europe in the first quarter of the year.

A ministry press release quoted him as saying that the GDP grew by 1.7 percent in the first quarter of 2021 compared to the same period a year earlier. He said that a Eurostat assessment showed that Serbia has one of the best results in Europe. He said that the growth of the GDP allows the government to raise pensions and salaries.

According to the minister, industrial production was 33.9 percent higher in April than in the same month a year earlier and 5.8 percent higher than the 2020 average. He said that the figures show that the financial aid measures for the economy and public did what they were meant to do.

Source:  https://rs.n1info.com/english/news/finmin-says-serbia-has-one-of-greatest-growth-rates-in-europe/

Serbian government takes over gas transport company

May 28, 2021

Ownership of the Transportgas company was transferred on Friday from the state-owed Srbijagas to the Serbian government,

The transfer documents were signed by Srbijagas CEO Dusan Bajatovic and Minister of Mining and Energy Zorana Mihailovic. Transportgas is the state-owned company in charge of transporting natural gas and managing the pipeline system.

Mihailovic said that this was the first step in reforming Srbijagas and the entire gas industry, adding that Serbia now has an independent gas operator while Bajatovic said that Srbijagas would work with the government and energy ministry to implement a restructuring plan.

Mihailovic, a ranking official of the ruling Serbian Progressive Party SNS), has been calling for reforms in the energy sector and has focused on the gas industry. Bajatovic, an official of the Socialist Party of Serbia (SPS) which is part of the ruling coalition, has resisted her attempts to take control of the entire energy sector.

Source:  https://rs.n1info.com/english/news/serbian-government-takes-over-gas-transport-company/

Serbian Environment Ministry official reports to parliament committee

May 28, 2021

A senior Serbian Environment Ministry official said on Friday that the ministry never denied air pollution problems.

Ministry State Secretary Ivan Karic told the parliament Environment Committee that the ministry that ministry reported extensively on the problem. “The air pollution problem is great, the problems are decades old – the use of fossil fuels, traffic, small heater facilities,” Karic said.

He said that 10 municipalities had been awarded a total of 100 million Dinars (1 Euro – 118 Dinars) to co-finance projects aimed at reducing air pollution and another 200 million to 24 local communities to improve heating facilities as well as another 100 million Dinars to plant trees in 38 municipalities. He said that a plan of activities had been adopted for 2021, adding that activities were being coordinated with European Union member states on Serbia’s pre-accession negotiations.

Karic said that the government feels that the economy can’t advance at the expense of the environment.

Source:  https://rs.n1info.com/english/news/serbian-environment-ministry-official-reports-to-parliament-committee/

Brnabic: Serbia no longer seen as country with cheap labor

May 27, 2021

Prime Minister Ana Brnabic told the closing of the Kopaonik Business Forum that no one thinks of Serbia as a country with cheap labor.

“Serbia today is a country that people want to work with,” she said adding that the country has the lowest drop in the GDP in Europe and will exceed the projected six percent economic growth this year.

“The growth is carried by the growth of the construction industry, the construction of roads, digitalization,” she said. According to Brnabic, 330 kilometers of roads are being built a present. “We have invested four billion Euro into the infrastructure under construction now,” she said.

Source:  https://rs.n1info.com/english/news/brnabic-serbia-no-longer-seen-as-country-with-cheap-labor/

Brnabic: Environment, green economy are priorities

May 26, 2021

Serbian Prime Minister Ana Brnabic told an online conference on green industrial policies that the environment and transition to a green economy are priorities for the government.

She said that Serbia is capable of financing the start of large-scale projects and added that some investments have already been launched. The conference was organized by the Embassy of Germany and the German-Serbian Initiative.

“We will launch the construction of water purification facilities in 28 local communities this year as well as projects to improve and protect air quality in places where it is worst because of the use of fossil fuels and coal for central heating, she said. Brnabic said that Serbia needs to invest up to six billion Euro for water management to reach European Union standards and invited German companies to join in those projects, saying that “there is a lot of room for public-private partnerships”.

German Ambassador Thomas Schieb told the online conference that the European Union wants to become climate neutral by 2050 and added that this is an ambitious goal for Serbia as a candidate country. “To achieve climate neutrality over the next 30 years, all current and future EU members have to reduce the emissions of toxic gases by establishing circular economies and intensifying efforts to protect the environment,” he said and warned that the modernization of the economy could lead to losses of jobs and the disappearance of some industries.

Source:  https://rs.n1info.com/english/news/brnabic-environment-green-economy-are-priorities/

Serbian Energy Minister says no jobs lost in energy transition

May 26, 2021

Serbian Energy Minister Zorana Mihailovic told the Kopaonik Business Forum on Wednesday that no one will lose their job because of the energy transition.

Mihailovic said that the government plans to invest 16 billin Euro in green energy over the next 10-15 years, creating new capacities and jobs. “Every other interest is often manipulative or private,” she said.

Commenting the strike at the Kolubara mine, the minister said that she wants the public to know that the Serbian power company (EPS) is not for sale, adding that she found the protest unusual. She said that it never crossed her mind that the strike was organized to oust her from her post. She said that the strike cost the EPS almost half a million Euro. “We believe that there is no need to build new thermal power plants and we insist on completing projects that EPS invested in as soon as possible,” she said.

Mihailovic said that the energy transition is an issue which can no longer be on hold and recalled that laws on renewable energy sources and energy efficiency had been adopted to enable the transition and added that Serbia uses 40 percent more energy than it needs.

The minister said that there are plans to invest 150 million Euro into energy efficiency projects next year. “We want to see roofs in Serbia covered in solar panels,” she said and added that energy use is an issue of state and public interest. Mihailovic said that Serbia will not be depend on others for electricity during the transition but warned that Serbia will have to pay more than a billion Euro a year in carbon dioxide emission taxes because of its thermal power plants.

Source:  https://rs.n1info.com/english/news/serbian-energy-minister-says-no-jobs-lost-in-energy-transition/

Serbia’s GDP rose 1.2 percent in Q1 2021

May 5, 2021

The Serbian Republic Statistics Office (RZS) said on Wednesday that the country’s GDP grew by 1.2 percent in the first quarter of the year.

It added that the projected growth of the GDP for 2021 is 6 percent.

According to official figures, the Serbian GDP grew by 1.1 percent in 2020.

Source:  https://rs.n1info.com/english/news/serbias-gdp-rose-1-2-percent-in-q1-2021/

World Bank approves 82 million Euro loan for Serbia

April 30, 2021

The World Bank on Friday approved a loan of more than 82 million Euro to help Serbia create a more efficient and transparent public sector and recover from the coronavirus pandemic.

A press release said that the Public Sector Efficiency and Green Recovery Development Policy Loan, approved today by the World Bank Board of Directors, will provide €82.6 million to solidify this reform agenda and quicken Serbia’s recovery from the COVID-19 pandemic. It quoted World Bank Country Manager for Serbia Stephen Ndegwa as saying that the “budget support operation is an important part of the World Bank Group’s engagement in Serbia and is closely linked to the pathways toward reducing poverty and boosting shared prosperity, with a strong focus on environmental sustainability and climate action”. He said that public sector reforms and greening the recovery are important vehicles to accelerate Serbia’s European integration agenda, adding that the operation is only the start of comprehensive support.

According to the press release, the operation will support Serbia’s efforts to improve the public sector and initiate a green recovery with the Agence Francaise de Development which is providing financial support to the government separately. “Public sector efficiency improvements are expected to come from a more transparent and efficient public procurement, improved mechanisms for public sector hiring, more efficient management of social protection programs, better control of state aid, and a more predictable legal framework for international transactions. A green recovery will also focus on reducing air pollution and creating a legal framework for climate policy, actions that are expected to benefit people from all segments of the population.


EBRD: Bosnia could lose 245,000 jobs due to pandemic

April 28, 2021

According to the latest study by the European Bank for Reconstruction Development (EBRD) and the International Labor Organization (ILO) published on Wednesday, Bosnia is at risk of losing 245,000 jobs in micro, small and medium-sized businesses, most of which are occupied by youths unless the economic situation improves.

Nearly “245,000 workers are at immediate risk because of the characteristics of their jobs”, according to a new joint study by the ILO and the EBRD. This equals almost 20 percent of the workforce as at the end of 2020, the study said.
It identified 14 sectors as particularly vulnerable to the impact of the pandemic, including wholesale and retail trade, transport, crop and animal production, accommodation, and food services. These sectors largely overlap in Bosnia’s Republika Srpska and the Federation entities, the EBRD said.

The EBRD and ILO also concluded that of the 245,000 jobs at risk just under half (114,000) are in micro-enterprises with up to 10 workers. The large share of young people employed in exposed sectors may have an even larger impact on jobs, the study warns.

The assessment of the two institutions is based on how Covid-19 has affected the economy in Bosnia and Herzegovina to date. The study finds that during the third quarter of 2020 the decline in working hours caused by lay-offs and other temporary reductions in working time was equivalent to the loss of 170,000 full-time jobs. During the second and the third quarters of 2020, Bosnia and Herzegovina registered losses higher than the average in the six Western Balkans economies by 3 and 4 percentage points, respectively.

The study also highlights how hard the crisis has hit local enterprises financially. Almost 70 percent of micro-enterprises and around 60 percent of small and medium-sized enterprises reported cash flow challenges. Around 70 percent of micro-enterprises suffered considerable revenue losses of 50 percent or higher in April 2020. Both entities attempted to compensate all enterprises for their losses, regardless of their sectors.

To address the challenges ahead, the study has developed five policy recommendations:

• formulate comprehensive employment policies at the entity level;

• decouple health insurance from registration as unemployed;

• improve interoperability of databases and information exchange among various levels of government and across institutions;

• consider additional job retention schemes; and

• reconsider some of the design features of employment retention schemes, if they are reintroduced.

Manuela Naessl, EBRD Head of Bosnia and Herzegovina, said: “This report is very timely. Given the difficulties persistent in the labor market in Bosnia and Herzegovina even before the crisis, the central government and the entities could focus further efforts on improving the quality and quantity of jobs, fight emigration, decreasing labor force participation and informality, better the coordination of and increase the number of targeted support schemes, reducing and even harmonizing labor costs.”

Barbara Rambousek, EBRD Director, Gender and Economic Inclusion, highlighted the need to provide targeted support for vulnerable and disadvantaged people outside of employment, as well as young people who are among the most affected, as they mostly hold less secure, less well-paid, and often high-contact jobs. She stressed that the EBRD will continue to work on the inclusion of young people, skills, and strengthening the private sector in Bosnia and Herzegovina.

The joint ILO/EBRD report follows previous examinations of the impact of the coronavirus pandemic in Serbia and North Macedonia. The papers also include policy recommendations to address immediate challenges and long-term consequences. In addition to engaging in policy dialogue, the EBRD is a major investor in the Western Balkans with €1.3 billion of new investments in 2020 alone.

Source:  https://ba.n1info.com/english/news/ebrd-bosnia-could-lose-245000-jobs-due-to-pandemic/

World Bank expects to see 4.4 percent growth in Western Balkans this year

April 27, 2021

The World Bank said on Tuesday that it expects the countries of the Western Balkans to see growth of 4.4 percent this year, and 3.7 percent over the next two years.

“Growth in Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia – the six countries of the Western Balkans – is expected to return in 2021, in the wake of the region’s worst economic downturn on record during 2020. Following the economic devastation brought on by the COVID-19 pandemic that resulted in an estimated contraction of growth in the region of 3.4 percent last year, the Western Balkans region is expected to grow by 4.4 percent in 2021. Going forward, growth is expected to moderate to 3.7 in 2022 and 2023, with lingering damage from the pandemic continuing to depress investments and employment in the region,” the World Bank’s latest report said.

A press release quoted World Bank Regional Director for the Western Balkans Linda Van Gelder as saying that there have been some positive trends in the region. “We are certainly seeing some positive trends around the region, boosted by swift action taken by many countries to contain the worst impacts of the pandemic, but the health and economic devastation of the pandemic will continue to have an impact,” she said and added that vaccination, improved confidence, consumption, and trade, will help keep this momentum going, but that those countries “must remain vigilant in their efforts to introduce and reinforce policies that can lead to growth, protect health outcomes, and boost human capital”.

The report said that policy efforts in the region need to stay tightly focused on fighting the pandemic, limiting social damage, and nurturing recovery. “All countries should ensure that their health care systems are adequately resourced for vaccine purchase and distribution, testing, therapies, personal protective equipment, and upgrading and maintaining health care facilities. Investments in education, digitalization and other infrastructure projects, and green initiatives should also be prioritized, as they can accelerate the necessary transition to lower carbon dependence as countries emerge from the pandemic,” it said.

Source:  https://rs.n1info.com/english/news/world-bank-expects-to-see-4-4-percent-growth-in-western-balkans-this-year/

IMF, Serbia agree on new PCI to support policies and reforms

April 23, 2021

The International Monetary Fund (IMF) said on Friday that an agreement had been reached with the Serbian authorities on policies and reforms which would be supported by a new Policy Coordination Instrument (PCI) through 2023.

The press release said that the agreement has to be approved by the IMF Management and Executive Board which could consider it in June.

“While the COVID-19 crisis has dealt a severe blow to the people and the economy of Serbia, as it has in other countries, the economic contraction was relatively moderate in Serbia, partly due to a strong policy response. Policies should continue to support people’s lives and livelihoods until the economic recovery is fully entrenched. As the emergency phase of the crisis ends, policy support needs to be reoriented toward building a greener, more digital, and sustainable economy. Over the medium term, it will be important to restore the country’s financial defenses and anchor them through a new fiscal rule. Higher and more sustainable growth over the medium term will require improving the business environment, the rule of law, the efficiency of state-owned enterprises, and environmental policies,” it said.

It said that Serbia’s recovery seems to be on track but that its economic outlook remains highly uncertain. The press release said that Serbia coped well with the pandemic with its economy expected to continue recovering this year, adding that its decisive policy responses have helped limit the effects of the pandemic. “Against this background, a supportive policy stance continues to be appropriate,” the IMF said.

It recommended targeting further support more directly at the most vulnerable households and firms and the sectors most affected by the pandemic. “Once the recovery is fully underway, it will be important to rebuild the policy buffers and to anchor them by a new fiscal rule… and advancing the reforms of Serbia’s large and inefficient state-owned enterprises remains critical,” the press release said and added that improving the business environment would help attract foreign as well as domestic investment.

Source:  https://rs.n1info.com/english/news/imf-serbia-agree-on-new-pci-to-support-policies-and-reforms/

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