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Serbia’s External Trade Dynamics Unveiled: A Closer Look at Q4 2023

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Current data on foreign trade indicate an intensified reduction in dynamics, primarily due to an increase in imports, which recorded a year-on-year value decline of 10.5% in September (350.7 million euros). However, for the first time since the escalation of the COVID-19 pandemic (in the period from March to August 2020), a year-on-year decline in the value of exports has been registered, amounting to 5.7% (144.1 million euros). The trade deficit has decreased by 26.5% (206.5 million euros). A year-on-year decline in the trade deficit in euros has been observed for the ninth consecutive month.

During the January-September period, the value of merchandise exports was 21.5 billion euros (5.6% higher compared to the same period in 2022), imports were 27.2 billion euros (6.1% less), and the deficit was around 5.7 billion euros (33.9% less). The trend of merchandise exports shifted from increasing to decreasing starting from February 2023, while merchandise imports shifted from May 2022. The new turning point in the trend cycle occurred in August 2023 for imports, while for the deficit, it was noted in July.

For the first nine months of this year, approximately four-fifths of merchandise imports were covered by exports (79.1%), roughly the same as in September at 80.8%, which is a 4.2 percentage point improvement compared to the same month in 2022.

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The Manufacturing sector, which has the highest share in total exports among all sectors (85.8%), achieved cumulative export growth of 7.0% in the January-September 2023 period compared to the same period in 2022, with a year-on-year decline of 0.9% in September of the current year. The Mining sector, with a share of 5.3% in total exports, recorded a cumulative decline in exports of 13.8%, while the Supply of electricity, gas, steam, and air conditioning sector achieved a cumulative export growth of 89.3%.

The sectors within the Manufacturing industry with the highest export value, or the largest share, include Electrical equipment manufacturing (export value of 2.4 billion euros, with over a third of this sector’s exports going to the German market), Motor vehicle and trailer manufacturing (where Germany is the most important export destination), Food product manufacturing, Rubber and plastic product manufacturing, Unspecified machinery and equipment manufacturing, and Basic metals manufacturing. When looking at exports by economic purpose, products for reproduction dominate (with 62.0%), followed by consumer goods and equipment. Again, according to purpose groups, the largest impact on export dynamics in the first nine months was from the export of capital goods (with a share of 22.5%, a growth of 25.5%) and energy exports (with a share of 6.5%, a growth of 30.8%, and a contribution of 1.6 percentage points).

In terms of imports, since July and August of this year, the trends of all purpose groups have been growing, slightly below last year’s average. The most pronounced decline in energy imports, and in September, it is at a level one-third lower than last year’s average. When observed by purpose groups, the most significant impact on the decline in merchandise imports was from the decline in energy imports (with a share of 14.2%, a decline of 27.5%), along with the import of intermediate goods (with a share of 34.8%, a decline of 7.1%, and a negative contribution of -2.5 percentage points).

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