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The Serbian construction industry shows an enviable level of resilience and strong signs of recovery

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While the crisis in the construction and real estate sector is becoming increasingly serious in the countries of the European Union, but also in a good part of the world, the Serbian construction industry shows an enviable level of resilience and strong signs of recovery, according to the analysis of the Institute for Politics and Economics of Southeast Europe (IPESE).

Instead of subsidies from the budget, tax breaks or price freezes, the government changed and modernized the legal solution, and the positive effects of its decision became apparent very quickly.

“What did the Government of Serbia achieve by modernizing the Law on Planning and Construction, which led to a boom in the market?

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First of all, it created what is by far the most important for business players – certainty and predictability of business. For every investor, the article of the Law that stipulates that 70 percent the territory of each local self-government unit must be covered by a planning document, on the basis of which location conditions can be issued (that is, a plan that can be directly applied)”, the analysis stated.

It is also said that the proactive action of the competent Ministry of Construction, Transport and Infrastructure, the government and the parliament can serve as a model for all other future actions of the government in the field of economy.

According to the data of the Statistical Office of the Republic of Serbia, in the second quarter of 2023, the value of works performed on the territory of Serbia increased by 21.1 percent in current prices compared to the second quarter of 2022, and the number of building permits issued in June (2,579) it is 17.9 percent higher compared to the same period of the previous year.

In July, a record number of permits

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In July, the number of issued permits continued to grow (2,709) – 14.2 percent compared to the same period of the previous year.

When looking at the number of issued permits per month this year, July is the record holder. In January, 1,568 were issued, in February – 1,786, in March – 2,576, in April – 1,972 and in May – 2,404.

In the forecast for the third quarter, the Bureau of Statistics announced that construction will achieve growth of 20.8 percent, which will make the biggest contribution (1.2 percent) to GDP growth compared to industry (0.5 percent) and agriculture (0. 8 percent), the analysis showed.

These data are proof that the recovery of the Serbian construction industry is progressing well and that its share in the gross domestic product is growing, which was 6.4 percent last year.

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