Serbia country brief

General

The Republic of Serbia is in South Eastern Europe. The population is approximately 7 million (2016).  Its capital is Belgrade.

Bilateral relations

The relationship between Australia and the Republic of Serbia is underpinned by community links and a growing Australian business and investment footprint in Serbia. According to the 2016 Census, Australia is home to over 20,000 people born in Serbia and almost 74,000 people with Serbian heritage.  Australia has maintained an embassy in Belgrade since 1967, when Belgrade was the capital of the Socialist Federal Republic of Yugoslavia. Serbia has an embassy in Canberra. 

Australia has a Direct Aid Program in Serbia, supporting local organisations and communities with small development grants.  The focus of the program is on social and economic empowerment, such as for women, persons with disability and children in rural areas.

A Memorandum of Understanding to combat international money-laundering was signed in February 2012. Australia and Serbia signed an air services agreement in May 2013.  In June 2013, Australia and Serbia held the first round of negotiations toward a bilateral Social Security Agreement.

High-level visits

(Note: Positions indicated in the list below were held at the time of the visits)

To Serbia

  • 2017: Ms Julie Bishop, Minister for Foreign Affairs
  • 2017: Ms Concetta Fierravanti-Wells, Minister for International Development and the Pacific
  • 2014: Mr Greg Hunt, Minister for the Environment
  • 2008: An Australian Parliamentary delegation led by Mr Roger Price, Chief Government Whip.

To Australia

  • 2012: Mr Ivica Dacic, First Deputy Prime Minister and Minister of the Interior.

Bilateral trade and investment relationship

Australia’s bilateral trade with Serbia is modest but has grown steadily over the last few years.  In 2016, total two-way goods and services trade with Serbia was worth $123 million. Services represent around 60 per cent of trade with Serbia, with imports of $55 million and exports of $18 million.  Travel-related services account for $52 million of services imports to Australia from Serbia and $16 million in exports. Goods imports from Serbia were worth $47 million (Australian exports were $3 million), with major imports including pumps for liquids and parts, medical instruments (including veterinary), prepared and preserved fruit, and glassware.

Serbia’s attractiveness as an investment destination is growing with a relatively inexpensive and skilled labour force, free trade agreements with the region and Russia, and progress toward EU accession.  In 2016, Australian investment in Serbia was worth $7 million. Other investment information is limited (not published or zero).

Australian companies and entrepreneurs are showing growing interest in Serbia and the wider region, particularly in services and mining.  Dozens of Australian-based firms and Australian entrepreneurs operate in Serbia, including global market leaders. The Australian Serbian Commerce Chamber was launched in 2017, as a not-for-profit association aiming to strengthen bilateral trade and investment between Australia and Serbia.

Political Overview

The Republic of Serbia is a parliamentary democracy. The President is the Head of State and is directly elected for a five-year term.  The President's role is largely ceremonial and includes nominating the Prime Minister in consultation with the National Assembly.  The current President, Mr Aleksandar Vucic, was elected in April 2017.

The Prime Minister, currently Ms Ana Brnabic, is the Head of Government.  Ms Brnabic was appointed in June 2017.    

Serbia is a member of a number of key international organisations, including the United Nations and the Organization for Security and Co-operation in Europe (OSCE).  Serbia is a candidate for membership of the European Union.  The European Union granted Serbia candidate status in March 2012 and opened formal negotiations in January 2014.

Economic Overview

Serbia's post-Milosevic economic progress was substantial prior to the global economic crisis. Driven primarily by Serbia's membership aspirations to the European Union and in the World Trade Organization, economic reform moved forward in many areas, but challenges remain. From 2001 to 2008, Serbia’s economic growth was import and consumption driven, financed by privatisation revenues and foreign-currency denominated borrowings. As a result Serbia accrued sizable imbalances.

The global economic crisis caused Serbia's GDP growth to fall from 5.4 per cent in 2008 to - 3.1 per cent in 2009. Serbia has experienced multiple shocks to its economy over the nine years since: from the global economic crisis of 2008 and the subsequent euro zone crisis, to the floods of 2014. This led to large macroeconomic imbalances including fiscal and current account deficits, high unemployment and volatile inflation. In 2016, the Serbian economy started to recover with GDP growth of 2.8 per cent, and the IMF is forecasting annual economic growth of 3.0 per cent in 2017. Backed by a three-year 1.2 billion euro precautionary stand-by arrangement with the International Monetary Fund (concluded in 2015), Serbia continues to pursue structural reforms, focusing on state administration, public finances and state-owned enterprises.

European investment dominates the Serbian economy, while the energy sector is dependent on Russian investment. China is emerging as a key player in the telecommunications, infrastructure and transport sectors.​

Last Updated: 26 August 2013