During this year, the SCC launched more than 100 regulatory improvement initiatives.
The Council for Coordination of Activities and Measures for Growth of Gross Domestic Product, which the Government formed two years ago, is working to find ways to accelerate the growth of the Serbian economy. Since last year, the Serbian Chamber of Commerce has been participating in this business. The problems and needs of the economy reach the competent authorities. This year alone, the SCC initiated more than 100 regulatory improvement initiatives. They were accepted and implemented 35.
The SCC believes that the Council is delivering results. GDP grew by less than three percent in the first half of the year, but reached a jump of 4.8 percent in the third quarter.
– Considering the relatively slower economic growth in the first two quarters of this year, the GDP Council contributed significantly to the acceleration of economic activity in the second half of the year – says Mihailo Vesović, Director of the Sector for Strategic Analysis, Analytics, Services and Packages of SCC products.- It has enabled numerous production processes and infrastructure projects to be more efficient, ie to run smoothly. The GDPR Council is the body responsible for coordinating economic policy measures. Tax, customs and incentives, all in order to support the growth of gross domestic product. The Council is chaired by Prime Minister Ana Brnabic, and members include representatives of relevant ministries and government agencies, as well as representatives of major local governments and public companies. Emphasis is placed on the so-called instant measures, that is, the measures that the effect should give in the short term, as well as the system measures that should lead to sustainable GDP growth.
Its task is to identify and analyze current problems and needs of the economy through contacts with its members, as well as present them to economic policy makers.
– The Council formed working groups within the most important economic activities, metal, chemical, food and construction industry – explains Vesovic. – Significant companies, members of the SCC, as well as representatives of the SCC and line ministries participate in them. The GDPR, as a channel of communication of particular importance, contributes to efficiency in the implementation of economic initiatives and enables the “voice of the economy” to be heard at the highest level. Among the most significant initiatives implemented are the significant reduction or abolition of import duties on certain raw materials and semi-finished products, especially in the manufacturing industry; more efficient treatment and flow of goods at the borders in road freight transport, as well as changes to the relevant laws that will in the future lead to greater protection of investors, introduction of new forms of financing for micro, small and medium-sized enterprises, as well as improving the situation of scarce staff.
Vesovic believes that business support should be continued to increase their production capacity to meet growing demand in the domestic, regional and international markets. This supports the internationalization of business through the promotion of the economy, the signing of trade agreements with non-European markets, and the solution of labor shortages. He is most prevalent in the construction and manufacturing industries. Improvements to the business environment through a more efficient administration and judiciary system, as well as greater predictability, should be continued.
– It is of particular importance to continue to support domestic and foreign investors, while attracting long-term investments, which are technologically intensive, which bring greater added value – Vesovic said. – Maintaining macroeconomic stability while further improving the country’s credit rating should make a significant contribution, especially when it comes to foreign direct investment. Serbia’s credit rating is currently BB +, with a positive outlook for further improvement next year. Given that Serbia is currently just one level below the investment level, it is expected that Serbia as the first in the Western Balkans will enter the investment level by the end of next year.
The SCC will continue its efforts to reduce the tax burden on wages, repay tax credits and reduce corporate tax, in order to stimulate economic activity, reinvestment and new investments. Serbia’s economic growth will be based on investment activity, export growth and higher personal consumption in the medium term.
The Economy estimates that the Government’s realistic forecasts are that it will grow by four percent next year.
– Bearing in mind that this year the GDP growth rate will be above the initially projected three and a half percent, as well as that the recovery of the European economy is expected next year, we believe that the projection of growth of four percent next year is realistic – says Mihailo Vesović. – The low interest rates in the international capital market, the continuation of infrastructure investments within the Government’s “new investment cycle”, as well as the expansionary monetary policy of the NBS will certainly contribute to this.
According to World Bank studies, Serbia’s potential is an acceleration of five to seven percent.
– In addition to internal factors that condition such growth, such as structural reforms, tackling labor shortages, adjusting the education system to the needs of the economy, etc., there are also external factors that limit Serbia’s potential – points out Mihailo Vesovic.
– Serbia’s exports would have been higher in 2019, and therefore GDP, had it not been for quotas on steel imports into the EU as well as Kosovo taxes. Protectionist measures as well as regional political tensions need to be overcome in order for the economy to develop smoothly and reach its full potential.
