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Economic Figures

The year 2007 was marked with a continuing macroeconomic stabilization, record FDI, and international reform acknowledgements. For the third consecutive year, Serbia had one of Europe’s fastest growing economies. The major growth drivers were telecommunications, construction, and transport with the respective rates of 38.7%, 11.8%, and 11.4%, while industrial production recorded a 4.4% upswing. An increase in retail trade amounting to 6.5% reflects a rising purchase power. In tandem with strong household credit expansion in the banking sector, they fuelled massive local demand and private consumption.

Massive influx of FDI resulted in sharp local currency appreciation. Since the beginning of the year EUR recorded the lowest value on January 1st  when 1 EUR amounted to 79.23 RSD. According to the official middle rate of the National Bank of Serbia, one Euro is worth approximately RSD 83.

It is estimated that in 2008 GDP will reach $ 81.892 billion.

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Opportunities for Investors

Western-oriented, democratic parties enjoy strong support, while the Government is fully committed to building a highly attractive setting for doing business. The ongoing substantial legislative reforms, repeatedly commended by leading international institutions, aim to bring the legal framework in line with the EU acquis communautaire. The EU Feasibility Report particularly acknowledged recent reforms in the field of macroeconomic stability, financial sector improvement, legislative activities, and foreign relations.

Serbia is a full member of the International Monetary Fund (IMF), the World Bank (WB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Partnership for Peace, and many other international institutions.

Upon receiving a positive Feasibility Report, the negotiations on the Stabilization and Association Agreement (SAA) have begun, and it was signed on April 28th 2008. Furthermore, WTO general director has confirmed that Serbia could become a member of the World Trade Organization (WTO) by the end of 2009.

Investment projects in the country are insured against non-commercial risks by all major national and international investment and export insurance agencies, like MIGA, OPIC, Hermes, COFACE, SACE, ECGD, Kontrollbank, and others.

The protection of foreign capital is further safeguarded by Bilateral Investment Treaties signed between Serbia and 34 other countries, including the USA, UK, Germany, France, Austria, Italy, and Greece.

Attracting the highest FDI in the region and consecutively winning awards for the largest Greenfield investments are marking Serbia today.

Since 2001, total FDI in Serbia has reached $ 8.9 billion. The year 2006 brought a 283% upsurge against the previous year, with an all-time record of $ 4.387 billion. Serbia’s strong FDI track record is substantiated by internationally recognized awards for local Greenfield investors. In the past three years, Greenfield projects in Serbia were awarded by the Organization for Economic Co-operation and Development (OECD) as the largest Greenfield investments in SEE.

FDI was as high as $ 99.5 million in 2007, generally stemming mostly from privatization and acquisition deals in telecommunications, banking, insurance, and top manufacturing industries.

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Education, Personnel and Labor Market

As a result of the ongoing privatization and company restructuring process, unemployment increased slightly with a total number of 808,200 unemployed in September 2007. The official 2007 unemployment rate was 18.8%. Average monthly salary amounts to € 338, while the monthly gross statutory minimum wage stands at € 138.41. In addition, the employee has the right to receive additional percentage of the salary based on the overtime, public holidays, night work, and work in shifts. Salary compensations include the following:

• Compensations during sick leave due to occupational disease or injury at work – 65% of the salary
• Compensations during annual leave, public holidays and paid leave – 100% of the salary

Statutory working hours in Serbia are 40 hours per week, while time over the statutory hours is considered overtime and may amount up to 4 hours per day or 8 hours per week. A break is at least 30 or 15 minutes, depending on whether an employee works full time or 4-6 hours a day. An employee has the right to a break between two consecutive working days of at least 12 hours, while weekly break is no less than 24 hours. Annual leave can be used after a minimum of 6 months from the employment contract starting date, and totals a minimum of 20 days per year. Maternity leave lasts up to 3 months starting from the date of birth. Upon the expiry of the maternity leave, the mother or father of the child may use a paid leave for infant care for a total of 365 days, which includes maternity leave.

Skilled and productive labor force has proven to be one of Serbia’s major competitive advantages in the global investment market. With a unique combination of high quality and low-cost skill-set, it is widely regarded as a strong business performance driver. Unlike most transition countries in CE Europe, Serbia fostered extensive relationships with Western economies for decades. A list of blue-chip companies maintaining strong ties with local partners is lead by Siemens, Alcatel, General Motors, FIAT, IKEA and many others. Throughout years of cooperation Serbian workers have received specific know-how and adopted advanced technology applications and rigorous quality control standards. The skill level of local labor force is reflected in high industrial productivity, which increased by 11.4% over the past five years, and only in 2007 by 1.8%.

The quality of Serbia’s intellectual capital is based on its educational system generating well educated, fast-learning, multilingual, and IT literate people. Technical education is particularly strong, thus high school students perform among the best in mathematics, physics and IT international competitions.

In recent years the number of university graduates grew by almost 14% annually averaging 14,370, while 1/3 of all students graduate from technical universities.

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Competent On-Site Personnel Consulting

HILL Serbia in numbers:

• More than 1,300 candidates placed
• More than 26,000 interviews
• More than 15,000 psychometric tests
• More than 8,000 candidates presented
• 6 highly educated colleagues in Belgrade
• Our colleagues speak 4 languages: Serbian, English, German, Swedish

HILL Serbia is assisted in its work by the experience and know-how of the HILL Network. Over 30 years of personnel and management consultancy, scientific methodology, and an extensive network in Europe and Central Asia enable HILL to provide successful consultancy in the areas of personnel and management.

For inquiries and requests please contact:

HILL International d.o.o.
Mr. Dragan Čandrlić
Sarajevska 11
SCG - 11000 Beograd
Phone: +381 11 3615 662
Fax: +381 11 3615 662
E-mail: hill@hill.co.yu
www.hill.co.yu 

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