The State of Economic Governance
in Serbia
A comprehensive baseline assessment of Serbia's economic governance, institutional frameworks, and progress toward EU accession criteria.
Key Findings
Estimated time until economic convergence with EU at current trends
State aid for large FDIs (€434M) vs SMEs (€55M) — structural disadvantage for domestic firms
Real effective exchange rate appreciation since 2013, eroding export competitiveness
Security spending surplus nearly matches the human capital investment shortfall
Report Sections
The report is organized into four main parts, covering macroeconomic foundations, market economy requirements, and specific policy areas under the Reform Agenda.
Introduction
Overview of the report's purpose, the EU Growth Plan framework, and the philosophy of good economic governance
Serbia's Economic Convergence with the EU
Analysis of Serbia's position relative to EU economic fundamentals, including income, productivity, labor markets, education, and regional disparities
Macroeconomic Sustainability
Analysis of Serbia's macroeconomic balance, real exchange rate dynamics, and evidence of competitiveness challenges
Functioning Market Economy
Analysis of the business environment including state aid, investment management, public procurement, and executive branch dysfunctions
Resource Allocation and Industrial Policy
Analysis of Serbia's fiscal priorities, the SME disadvantage in state aid, and five measures to convert state aid into a productivity pipeline
About This Report
This report is the first in a series of annual assessments of Serbia's economic governance, including its preparedness for EU single market competition. It serves to inform policy-makers, development partners, and the public while supporting the implementation of the EU's Growth Plan for the Western Balkans.
The analysis innovates by shifting focus beyond regulatory compliance to a dual-track analysis of policy and resource allocation — treating budgetary expenditures as the ultimate indicators of reform sincerity. It proposes five concrete measures to convert state aid into a productivity pipeline.
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