The transition period in Serbia left many citizens unprepared for investment opportunities, with the 1990s financial crises damaging household liquidity and resulting in mistrust of financial markets. As a result, real estate became the primary safe haven for preserving wealth.
In the early years of the transition, government bonds offered high returns of 20-30%, but few citizens invested, largely due to a lack of trust in the state. At the same time, shares from privatized companies like Hemofarm, Metalac and Sintelon were offered at low prices, and the Belgrade Stock Exchange experienced a market bubble, with shares gaining value. However, the 2008 global economic crisis wiped out much of the value for investors who had entered the market during the boom.
Meanwhile, Serbia’s banking sector flourished, with foreign banks offering high interest rates on deposits, attracting citizens despite the declining global interest rates. However, over the past decade, deposits in euros have provided weak returns, often negated by inflation. Conversely, savings in dinars yielded better returns, especially as the dinar appreciated and citizens saw four times higher returns than in euros. By the end of 2024, dinar savings reached an all-time high, marking a significant success in Serbia’s dinarization efforts.
The rise in inflation pushed many citizens to explore global financial markets, particularly younger generations such as millennials and Gen Z, who are more inclined to invest in global ETFs and stocks. US stocks, especially in the tech sector, have provided strong returns, though risks remain high. Additionally, the local stock market in Serbia has offered solid returns over the past decade, especially from companies like Nikola Tesla Airport and the Oil Industry of Serbia, though weak liquidity has limited its growth potential.
Gold has regained popularity as a safe investment, with rising inflation and geopolitical instability pushing citizens to invest in physical gold. Gold investments have performed well, especially in recent years, and the growing availability of gold coins and bars reflects its rising demand.
While the domestic fund industry remains focused on cash funds, alternative funds are emerging for more experienced investors. Although the Serbian financial market has faced many challenges, there is hope that domestic financial instruments will play a more prominent role in future investment portfolios.
