13 May Interview with Dr. Siniša Mali, First Deputy Prime Minister and Minister of Finance, Republic of Serbia
Could you give us a snapshot of Serbia’s economic performance in 2024 and share with us what are the main trends shaping Serbia’s economy today?
Based on the latest 2024 data, Serbia ranks either first or second among the fastest-growing economies in Europe. From Q1 to Q3 of last year, we were second behind Malta with a 4% growth rate and we expect to close 2024 at 3.8%, maintaining a top position. This marks a dramatic shift from 2012 when Serbia was on the verge of bankruptcy and experiencing negative growth. Despite global challenges — COVID-19, the Ukraine war and the 2022 energy crisis — Serbia has transformed into Europe’s fastest-growing economy.
Every macroeconomic indicator reflects this success. In 2012, our GDP was around €35 billion; by last year, it had nearly tripled to €82 billion, all in a remarkably short time, despite global challenges. Serbia’s unemployment rate stands at a historic low of 8.1%, a sharp drop from 25.9% in 2012. Employment is at 51.9%, while foreign exchange reserves have reached a record €29 billion. In 2023, FDI hit €5.2 billion, the highest ever in Eastern Europe. Public debt remains stable at 44.1% of GDP as of January 1, far below the Eurozone average of 89%. Despite rapid growth, we have maintained macroeconomic stability, keeping debt levels low. Given these achievements, Serbia received its first-ever investment-grade credit rating (BBB-) from S&P in late 2023, a milestone reflecting our progress since 2012.
At the end of 2024, we signed a three-year agreement with the International Monetary Fund (IMF) to continue reforms we began in 2015. We remain committed to improving state-owned enterprises, the energy sector and tax administration to enhance Serbia’s competitiveness. With record-breaking FDI, Serbia attracts over 60% of all FDI in the Western Balkans, reinforcing our economic leadership. The IMF agreement further strengthens investor confidence, alongside our strict fiscal policies. In 2023, our deficit was 2.2%, well below the European average of 3.6%. Strong coordination between fiscal and monetary policy has yielded clear results.
Serbia is firmly on the EU path. We have agreed with the EU and the European Commission on a growth and reform agenda and are aggressively aligning all laws and regulations with European standards by 2026. By 2027, we will have met all formal EU membership requirements. While accession depends on the EU, we are fully committed to integrating into the European family.
The Ministry focuses on investments in critical sectors like education, healthcare and infrastructure. How do you see these investments driving national growth?
Every sector of Serbia’s economy — industry, services, tourism, finance and agriculture — is growing. GDP is driven by two key factors: domestic consumption and investment. According to an S&P report, domestic demand is a major growth driver. We have ensured that salaries and pensions increase annually in real terms, outpacing inflation. This has sustained consumer spending, significantly contributing to GDP growth. Wages continue to rise. The minimum wage is now €457, up from just €110–120 14 years ago, reflecting a steady improvement in living standards.
Serbia has a clear goal for 2027 as we prepare to host Expo 2027—the largest event in our history and the world’s biggest that year. Under the ‘Leap Into the Future – Serbia EXPO 2027’ initiative, we will invest €18 billion in 323 projects throughout the country to improve infrastructure and quality of life. A key goal is raising incomes: by 2027, we aim for an average salary of €1,400 (up from €329 in 2012), pensions of €650 (up from €202) and a minimum wage of €650 (up from €110). Despite global challenges, improving living standards remains our top priority and on this we are delivering.
Public investment is a key driver of Serbia’s GDP growth, with 7.4% of GDP allocated to infrastructure. To put this into perspective: from 1945 to 2012, Serbia built 370 miles of highways. In the past 12 years alone, we have built 365 miles and another 313 miles are under construction. For the first time, Serbia has a high-speed rail network, with trains reaching 200 km/h from Belgrade to Novi Sad and soon to Subotica. Through the ‘Leap into the Future’ initiative, we are investing in roads, railways, energy, schools, hospitals and agriculture. This not only fuels GDP growth, but also enhances quality of life and makes Serbia more competitive, attracting further FDI.
What measures are being implemented to ensure that SMEs can thrive, especially in the context of EU market integration and the challenges of the global economy?
SMEs are the backbone of Serbia’s economy, employing over 55% of the workforce and making up more than 90% of businesses. To support SMEs, we launched three major aid programs, choosing not to assist state-owned enterprises but to focus entirely on small and medium-sized businesses. We covered minimum wages for eight to nine months, ensuring job security. Additionally, a €2.5 billion government-backed guarantee scheme helped SMEs maintain liquidity and stay in business. As a result, unlike many European countries that faced mass bankruptcies and unemployment, Serbia emerged stronger, with record-high employment and record-low unemployment. This proactive government support proved crucial for economic resilience.
We are actively supporting SMEs through the Development Fund of Serbia, providing affordable loans for new investments and partnering with international financial institutions and the European Bank for Reconstruction and Development to facilitate low-cost financing via commercial banks. We also offer cheap loans for energy transition projects.
As Minister of Finance, I am focused on strengthening Serbia’s capital markets. We have secured $30 million to help SMEs understand and access capital markets, including issuing corporate bonds. The government fully funds the preparatory work for these bonds and the first SME will issue one before this report is published. We have also celebrated 130 years of the Belgrade Stock Exchange, with Jeffrey Sachs as a speaker — an opportunity to enhance financial market visibility. Diversifying funding sources is crucial for SMEs, beyond government and bank loans.
By opening financial markets, we enable them to secure better financing for their growth. A key indicator of our success is the rapid growth of Serbia’s ICT sector, now surpassing €4 billion in exports. Beyond direct support from the Ministry of Information and Technology, Serbia’s investment-grade credit rating, strong infrastructure investments and stable public finances create a productive environment for businesses to thrive. What ICT professionals need most is stability, peace and predictability and that is exactly what we provide. With the right conditions in place, they excel — and Serbia succeeds alongside them.
What steps are being taken to ensure that Serbia balances economic growth with environmental responsibility?
You can’t grow without integrating green initiatives into your strategy. In 2021, Serbia became the first in the region to issue a green bond, signaling our strong commitment to the green agenda. With a 1% coupon and huge demand, the bond funded energy and transport projects, such as replacing diesel locomotives with electric ones. In 2024, we issued an environmental, social, governance (ESG) bond, another regional first, and received the ‘Transaction of the Year’ award. The bond was oversubscribed, further demonstrating Serbia’s dedication to environmental goals.
Despite global uncertainties like the Ukraine conflict, energy crises and elections in the US and UK, Serbia’s economic success has remained strong due to solid fundamentals and clear goals. We aim to generate 45% of our energy from renewables by 2030 and become carbon neutral by 2050. These targets align with global standards and investor demands for green energy. Our green commitments are backed by initiatives like the 2021 Green Bond and 2024 ESG Bond. A key example is the agreement with US company UGT Renewables to build a 1 gigawatt solar park, reinforcing Serbia’s commitment to renewable energy.
Serbia and the US have been strengthening their ties, with many US. How do you view this partnership evolving and what key sectors do you see attracting the most attention from American investors?
Serbia is on the right path, but there is untapped potential in US-Serbia cooperation. Our trade is currently €3.5 billion and US companies employ 32,000 people in Serbia, with major investors like UGT Renewables and Bechtel involved in infrastructure. However, there is much more potential, particularly in sectors like ICT, energy and real estate. We signed agreements with the US in 2018 and 2021 to stimulate investment and cooperation in infrastructure and energy. We also have strong US investment in our public debt markets. A notable real estate project with Trump International Hotel, valued at €500 million, is set to start in the next 12 months. There is strong American interest in areas like AI, ICT, defense and energy, which we need to capitalize on to further strengthen US-Serbia relations.
The Serbian American Business Council is very active and we aim to reshape Serbia’s image to attract more investors. Our national airline now flies directly to New York, Chicago and will soon add Miami to its routes. We also fly to Beijing, Shanghai and Guangzhou, making us the only country in the region with direct flights to both the East and West. This connectivity strengthens our economy and global presence. Serbia is the dominant economy in the Western Balkans and as we approach Expo 2027, the region’s largest growth opportunity, we expect growing interest from American and global investors.
Serbia has transformed into one of Europe’s fastest-growing economies. If you choose to visit, you will experience warm hospitality — Serbs take pride in being great hosts. We look forward to welcoming you to our country soon.