The transition in Serbia 2000–2018: the comparative analysis
The transition in Serbia 2000–2018: the comparative analysis

Summary/Abstract: By low participation of investments in GDP, which amounts to about 18%, Serbia is among the negative record holders in analyzed 15 countries of Central and Eastern Europe. To achieve long-term sustainable GDP growth rates, Serbia would have to increase the share of investments in GDP to around 22.2%, which is the average of observed 15 countries of Central and Eastern Europe. To increase the share of investments in GDP, Serbia needs to improve economic environment, increase the share of the public investments in GDP, and improve the business of public companies along with solving problems of social-owned companies in privatization. The largest shortfall of investments, of around 3% of GDP, relates to the private sector, especially when the small and medium domestic companies are concerned. A strong increase of investments, especially those in the production of tradable goods, would not only lead to the acceleration of economic growth but also would improve the overall structure of GDP. This was the case in many of analyzed 15 countries of Central and Eastern Europe, especially in those who are today members of the EU. The growth of investments would remarkably speed up the rise of export, so that the Serbian economy, like the Hungarian or Slovakian ones, would achieve high and sustainable economic growth. Solving accumulated problems in the Serbian economy and creating conditions for long-term sustainable growth requires a strong shift in economic policy, as well as acceleration of reforms. First of all, the reforms related to the rule of law.

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