PMR Research is a specialised custom market research unit of PMR Ltd., a British-American company based in Poland. We offer a wide range of research services in Central and Eastern Europe for companies interested in business over the countries in the region.

Research services provided by PMR Research in Serbia include:

• brand and company image studies
• research on customer preferences, their satisfaction and their purchasing habits
• product concept tests
• usage & attitude studies
• internet surveys
• quantitative surveys - telephone, CATI, face-to-face
• qualitative research - focus groups, IDIs
• industry analyses (comprehensive analyses of given market sectors performed using PMR's proprietary methodology PMR MarketInsight)
• preparation of databases
• fieldwork services

Why to invest?

Committed to becoming an EU candidate Introducing reforms to harmonize legal environment with the one of the EU Biggest ex-Yugoslavia country Industrial traditions Favourable geographical location between EU and Middle East Educated workforce Relatively low employment costs Even in communist times had strong links with Western economies Number of university graduates grows by 14% every year

Business and economical environment

Formerly a leading country of the ex-Yugoslavia, Serbia, after a period of prolonged communism under Milosevic, returns now onto the scene of the European economy. Prior to the dissolution of Yugoslavia it took part in its well developed (compared to CEE standards) industry but war with its neighbours, the collapse of the Soviet Union and years of economic sanctions has reduced its economic potential. Currently, after a poll in 2008, Serbia seems to be committed to enter the EU and even started to co-operate in the 1990s war crimes prosecution, sending Mr Karadzic (a former Bosnian Serbs leader) to The Haag. Serbia is now in the process of harmonizing its legal standards with those of the Union and still has relatively low labour costs of its educated workforce. The key sectors one would find interesting targets for investment include agriculture, automotive, aviation, construction, energy, mining, ICT, pharmaceutical, textile and clothing as well as wood and furniture. Serbia has a developed infrastructure and even in the communism times were already well connected with the economies of Western Europe. Besides the various types of incentives to investors it has introduced a low and flat rate of 10% corporate income tax. However, it must be said that political and currency risk still exists and must be taken into account while planning the market entry.


The estimated GDP of Serbia for 2009 is EUR 29.5bn, which translates to EUR 4,000 per capita. However, the economy (of which nowadays mining and manufacturing are the largest sectors) developing on average by 5.4% annually in the period between 2000 and 2008 is forecasted to shrink in 2009 by 2.5% in the result of the problems in the global economy. The 2010 will still be in red, however, it is expected that GDP will decrease by only 0.7%. However, it must be noted that much bigger problem of the Serbian economy is very high deficit in the current account reaching -17.8% of the GDP, up from -10.1% in 2006.

Serbia is said to attract one of the highest FDI in the region and largest greenfield investments. Since 2001, the total FDI rate in Serbia has reached EUR 8.16bn. This is partially a result of the late opening of the country at the Western investors after the Milosevic regime collapse but also of the strong industrial development in the former Yugoslavia times as well as ties with the Western companies in that period.

The unemployment rate in Serbia in 2008 has been recorded at relatively high level of 18% which is common among ex-Yugoslavian states due to huge grey market and structural problems in the economy. Number of unemployed Serbs after a decrease in the before 2008 period is forecasted to increase again with shrinking economy and rates of 21% and 21.5% are expected in 2009 and 2010 respectively.

The inflation rate which reached 11.7% in 2008 is expected to increase to 20% in 2009 and 17.5% the year after. This will reverse the downward trend observed in the pre 2008 period, however, no hyperinflation that used to be associated with Serbia in the 1989-1994 period is expected.

Social environment

Serbia with around 10mn people is primarily inhabited by Serbs, however there are also minorities including Hungarians, Bosniaks, Roma, Croats, Czechs and Slovaks, Macedonians, Bulgarians, Romanians. Especially, the northern province of Vojvodina is ethnically and religiously diverse.
Serbia is considered as one of the most diverse countries on the continent with its different regions of remaining cosmopolitan. For instance in Kosovo province there 90% of people are Muslim, Vojvodina province in large percentage Catholic or Protestant, whereas Central Serbia and Belgrade regions are Orthodox Christian in vast majority.
Villages and mountains of the country are the main sightseer attraction in Serbia and tourism plays an increasing role in Serbia for its most famous mountain resorts like Zlatibor, Kopaonik, and the Tara. Largest cities like Belgrade, Novi Sad and Niš, as well as the rural parts of Serbia experience growing popularity among tourists. 2.2 million tourists visited Serbia in 2007, being a 15% increase compared to 2006.
The Serbian educational system includes primary, secondary and higher education. Over 230,000 students study at seven public and seven private universities in Serbia. The literacy rate among Serbian population is 98%, according to UNDP data.

Infrastructure and technology environment

Infrastructure in Serbia consists mainly of the railway network which in 2006 had a length of 3,800 km and the road network which was 37,937 km long, including 560 km of motorways and expressways. In 2007 there were 2,830,721 main telephone lines; however, mobile phones were also very popular – with over 7.5mn users.

89% of households in Serbia have fixed telephone lines, 42% of households have computers, 33% use the internet, and 42% have cable TV. The most modern way of communication - the internet - had 1.4mn users in 2006 and there were 22,046 internet hosts registered in 2005.

Political environment

On May 21, 2006, the Republic of Montenegro held a successful referendum on independence and declared independence on June 3. Subsequently, the parliament of Serbia stated that the Republic of Serbia was the continuity of the state union, changing the name of the country from Serbia and Montenegro to the Republic of Serbia, with Serbia retaining Serbia and Montenegro's membership in all international organizations and bodies.

Following the long year development of the situation in the province Kosovo, on February 17, 2008 the local parliament in – Kosovo Assembly - declared independence. This act has been recognized and acknowledged by over 50 countries worldwide, though Serbia continues to reject it.

The Republic of Serbia is a parliamentary democracy, whereby 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 with 250 members elected for a four year term. The Judiciary system is independent of the executive and legislative systems.

With the Radicals having split in the parliament after 17 members formed a new parliamentary grouping led by former deputy leader Nikolic, the political stability in Serbia is very likely to improve. This gives good perspectives for better co-operation with The Hague Tribunal and of Serbia achieving candidate country status in 2009. At the moment Serbia is a non EU country with plans of entry but not candidate.

General data

Area: 77,474 sq km
Population: 10.16mn (2008, including Kosovo)
Capital city: Belgrade
Language: Serbian 95%, Albanian 5%
Ethnic groups: Serbs 82.9%, Hungarians 3.9%, Bosniaks 1.8%, Roma 1.5%, Yugoslavs 1%, other 8.9%
Land 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

	2006	2007	2008	2009f	2010f
GDP (EUR bn)	23.5	29.1	33.5	29.5	29.4
Population (mn)	7.4	7.4	7.4	7.4	7.4
GDP per capita (EUR)	3,177	3,946	4,552	4,003	3,993
GDP (constant prices y-o-y %)	5.6	7.1	5.5	-2.5	-0.7
CPI (average, y-o-y %)	12.7	6.5	11.7	7.8	6.5
Central bank reference rate	14.00	10.00	17.75	20.00	17.50
Monthly wage, nominal (EUR)	376	484	561	493	491
Unemployment rate (%)	20.9	18.1	18.0	21.0	21.5
Net FDI (EUR bn)	3.4	1.8	1.9	1.1	1.3
FDI % GDP	14.4	6.3	5.6	3.7	4.4
FX reserves (EUR bn)	9.0	9.6	8.2	8.0	8.0
FX reserves/Gross foreign debt (%)	60.6	54.2	37.4	35.2	32.3
Exchange rate to USD AVG	67.19	58.34	55.40	75.22	78.71
Exchange rate to EUR AVG	84.42	79.98	81.49	97.58	103.50

Last update: Q2 2009

Useful data

Currency: In Serbia the Serbian dinar (RSD) is legal tender, but the euro (EUR) is the de facto currency.
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:
phone: (48 12) 618 90 80
faks (48 12) 618 90 08
e-mail: [email protected]

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Serbia market reports
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