September 2014

Macroeconomic Developments
in Serbia










Inflation Pressures are Low
Inflation is below the target tolerance band but is expected to return within the band by
the year-end
Inflation is below the target tolerance band mainly due to a
fall in food prices, resulting from lower agriculture prices.
However, disinflationary impact of food prices is waning
(contribution -0.2pp y-o-y in August).
Low core inflation is reflecting relative exchange rate
stability in the previous period and low aggregate demand.
Inflation expectations of the financial sector are anchoring
within the target tolerance band.
Disinflation pressures of food prices are about to dissipate
and contribute to rise in inflation in Q4 2014, along with
expected electricity price hike.
Low aggregate demand additionally suppressed by
additional measures of fiscal consolidation will remain the
strongest disinflationary factor.
Main risks to the projected inflation path are associated
primarily with global and fiscal developments.
Chart 1 CPI Developments
(y-o-y rates, in %)

Chart 2 Inflation Projection (from August 2014 IR)
(y-o-y rates, in %)

1.5
2.0
0
2
4
6
8
10
12
14
16
1
2009
3 5 7 9111
2010
3 5 7 9111
2011
3 5 7 9111
2012
3 5 7 9111
2013
3 5 7 9111
2014
3 5 7
CPI Inflation
CPI excl. Food, Energy, Alcohol and Tobacco
0
2
4
6
8
10
12
14
3
2012
6 9 12 3
2013
6 9 12 3
2014
6 9 12 3
2015
6 9 12 3
2016
6
2
Net Exports and Investments - Main Drivers of
Economic Activity
Construction activity to push GDP growth in
Q3
In the coming period GDP growth will be
driven by net exports and investments
Economic growth in 2013 was one of the highest in the
region (2.5%), largely driven by agriculture, automobile and
oil industry. Positive trends were recorded in several other
industrial branches - energy, chemical, electronic industry,
etc.
GDP declined by 1.1% s-a in Q2 due to negative effects of
flooding on energy sector and agriculture.
GDP is expected to grow by 0.5% s-a in Q3 supported by
reconstruction in the areas hit by floods.
In 2014 GDP is expected to decline by 0.5% with positive
contribution to GDP movement coming from net exports
and investments (contributions: C -1.6, I +0.2, G
C
-0.2
G
I
+0.5, NX +0.5pp).
Determined by the expected set of additional austerity
measures and consequently the decline in final
consumption, it is likely to expect short-term stagnation of
GDP in 2015.
Future growth will depend on the speed of the euro area
recovery and the pace of fiscal consolidation.
Chart 3 GDP Developments
(seasonally adjusted, Q1 2006=100)

Chart 4 GDP Growth Projection (from August 2014 IR)
(y-o-y rates, in %)

100
105
110
115
Q3
2008
Q1 Q3
2009
Q1 Q3
2010
Q1 Q3
2011
Q1 Q3
2012
Q1 Q3
2013
Q1 Q3*
2014
*
NBS estimate
-3
-2
-1
0
1
2
3
4
5
Q2
2012
Q4 Q2
2013
Q4 Q2
2014
Q4 Q2
2015
Q4 Q2
2016
3
External Imbalances Expected to Narrow Further
due to Suppressed Domestic Demand
Mays flooding and slowdown in external
demand due to increased geopolitical
uncertainties led to drop in exports
CAB is expected to improve further with low
domestic demand and recovery of external
demand
In Jan-July 2014 current account balance improved by
12.7% y-o-y, reflecting supply-driven growth of exports.
In the same period, exports grew by 7.7% y-o-y, while
imports grew by 2.5% y-o-y due to weak domestic demand.
In July exports stood 44.3% above their pre-crisis level,
while imports were 6.0% below that mark. Exports-to-
imports ratio stood at 73.9% (12-month moving average).
The highest contribution to improvement of CAD/GDP
ratio in 2013 came from chemical (1.1pp), automobile
(0.9pp), oil industry (0.8pp) and services (0.5pp).
Despite adverse effects of the floods on CAD/GDP ratio
(1.0pp), we expect this years current account deficit to be
lower than in 2013.
As domestic demand remains suppressed by the fiscal
consolidation measures, investments in tradables sector
and euro area recovery will lead to further improvement in
trade balance.
Chart 5 Exports and Imports
(seasonally adjusted, 2008=100)
Chart 6 Current Account Deficit and Remittances
(% share in GDP)

40%
50%
60%
70%
80%
90%
60
80
100
120
140
160
180
1
2008
3 5 7 9111
2009
3 5 7 9111
2010
3 5 7 9111
2011
3 5 7 9111
2012
3 5 7 9111
2013
3 5 7 9111
2014
3 5 7
Exports, lhs
Imports, lhs
X/M coverage (12M MA), rhs
10.1
17.7
21.6
6.6
6.7
9.1
10.7
5.0
7.4
10.5
12.3
6.5
5.9
3.8
10,6
9,0
6,8
10,8 10,5
8,4
8,7
8,8
9,1 8,9
0
5
10
15
20
25
2006 2007 2008 2009 2010 2011 2012 2013 2014* 2015*
CAD (BPM-5) old methodology
CAD (BPM-6)** new methodology
Remittances
*
NBS forecast
** higher CAD according to new methodology arised from the statistical
discrepancy related to coverage of exports and imports of goods and inclusion
of reinvested earnings in income account
4
he fall of the Serbias risk premium since the
year beginning was the highest in the region
Serbias risk premium on historical lows in the
last four months
Serbias external debt decreased due to
private sector deleveraging
Despite the recent increase by app. 40 bp, EMBI spread for
Serbia has seen the largest fall among the observed
countries in the region since the year beginning (by more
than 100 bp).
At the beginning of September it stood at app. 260 bp.
In April S&P confirmed Serbias BB- rating reflecting
government willingness to conduct fiscal consolidation and
expected speed-up in structural reforms. In July, Fitch
confirmed B+ rating for Serbia, with stable outlook.
Total external debt to GDP ratio dropped to 80.0% at the
end of Q2.
The deleveraging process is driven by banks, as
enterprises are increasing their exposure in 2014.
Gradual bank deleveraging is expected to continue in
2014, as declining lending activity is increasingly financed
from domestic savings.
Compared to other CEE countries, bank deleveraging is
modest (8.5% GDP reduction from maximum exposure).
Chart 7 EMBI Risk Premium
(basis points, daily values)

Chart 8 External Debt
(EUR m)

0
200
400
600
800
1000
12
2009
2 4 6 8 1012
2010
2 4 6 8 1012
2011
2 4 6 8 1012
2012
2 4 6 8 1012
2013
2 4 6 8
EMBI Global Romania
Hungary Poland
Turkey Serbia
Croatia Bulgaria
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
-950
-700
-450
-200
50
300
550
800
1050
1300
1550
1800
Q2
2008
Q4 Q2
2009
Q4 Q2
2010
Q4 Q2
2011
Q4 Q2
2012
Q4 Q2
2013
Q4 Q2
2014
Enterprises, lhs
Banks, lhs
Private external debt in GDP, rhs
External debt in GDP, rhs
*Excluding EUR 672.1 mln growth in corporate external debt which is the result of purchase
transactions between two associated companies and thus cannot be regarded as real
cross border borrowing by firms.
5
Monetary Policy on Cautious Loosening Cycle
Recent depreciation of regional currencies due
to increased global uncertainties
Since June NBS kept key policy rate on hold
reflecting fiscal and external risks
The Dinar weakened by 2.7% in the first eight months of
2014.
Recent weakening of the dinar was driven by global
uncertanties, as well as by domestic factors - fiscal
uncertainty, higher CAD and increased demand for FX by
the energy sector.
In 2014, the NBS intervened in the IFEM by selling EUR
1015m and buying EUR 200m.

Risks of further escalation of geopolitical tensions could
negatively affect international capital flows and the
countrys risk premium.
Implementation of fiscal consolidation measures will
contribute to the alleviation of external risks and help to
stabilize inflation at a low level, which will enable further
monetary policy easing.
Bank lending rates have been following the key policy
rate. Recent drop in lending rates resulted from
subsidized loans programme initiated by the government.

Chart 9 Exchange Rate Developments
(Q2 2010=100)
Chart 10 Interest Rates
(y-o-y rates, in %)

50
55
60
65
70
75
80
85
90
95
100
105
110
115
120
12
2009
2 4 6 8 1012
2010
2 4 6 8 1012
2011
2 4 6 8 1012
2012
2 4 6 8 1012
2013
2 4 6 8
Serbia Romania
Poland Hungary
Turkey
13.6
8.5
5
10
15
20
25
30
1
2009
3 5 7 9111
2010
3 5 7 9111
2011
3 5 7 9111
2012
3 5 7 9111
2013
3 5 7 9111
2014
3 5 7 9
Private Sector* (3 months moving average)
Policy Rate
*weighted interest rate on non-indexed RSD loans (up to September 2010
the data was exclusively used for research purposes of NBS)
6
Recovery of FDI Inflows is Expected
EU accession process, government stability
and structural reforms will stimulate FDIs
FDI inflows are well-diversified, with
increasing share directed at tradables sector
FDI recovered in 2013 as a result of projects in the
manufacturing sector, followed by finance and construction.
In the first seven months of 2014 FDI inflow of EUR 0.7bn
was recorded. Majority of the inflows targets energy sector
(45% of total), manufacturing (24%) and retail trade (7%).
Despite geopolitical tensions, significant inflow in the
medium term is expected from the South Stream gas
pipeline. Bilateral agreements will result in increased inflows
from UAE and China.
Before the crisis, dominant share of FDI inflows was
directed at financial services and real estate.
Share of investments directed at tradables sector is
increasing, and is expected to contribute to future exports
growth.
Chart 11 Net FDI
(EUR bn)
Chart 12 FDI Composition by sector
(% of gross inflow)

1.250
3.323
1.821
1.824
1.373
1.040
2.197
0.669
1.229
1.250
1.400
0
2
4
6
8
10
12
14
16
18
2005 2006 2007 2008 2009 2010 2011 2012 2013 Total 2014* 2015*
FDI (BPM-6)**
FDI (BPM-5)
14.3%
6.4%
5.6%
4.7%
3.7%
7.0%
* NBS forecast **as of 2010, includes intercompany loans and reinvested earnings
2.3%
14.726
3.8%
4.3%
3.9%
6.2% of GDP
0
20
40
60
80
100
2007 2008 2009 2010 2011 2012 2013
Other Construction & real estate
Finance Trade & repairs
Manufacturing Tradable sector share*
*includes manufacturing, agricultre, transport, accomodation, food services
7
Fiscal Consolidation
Main Challenge for the Government
Set of additional austerity measures is to be
implemented by the government
which will stabilize public debt-to-GDP in
the medium-term
In H1 general govt. deficit amounted to 7.6% of GDP (incl.
below-the-line items) mainly due to high interest payments
(3.7% of GDP). Fiscal deficit is expected to reach 8% GDP
in 2014 partly due to flooding.
The austerity measures adopted earlier this year include the
preferential VAT rate increase, introduction of the solidarity
tax on wages in public sector and employment freeze.
Consolidation measures to be implemented in Q4 mainly
include cuts in public wage and pension bills, speed-up public
sector reforms and should result in stand-by arrangement
with IMF.
Public debt amounted to 20.9bn (67.0% of GDP) at the
end of July 2014.
In order to stabilize public debt in medium-term (by 2017),
a fiscal adjustment of app. 5pp of GDP is required over
2014-2017 period.
Reduction in below-the-line items (projected at 1.7% of
GDP in 2014) including loan guarantees to public sector
and bank recapitalizations is essential to stabilize public
debt.
Reform of public enterprises will contribute to this process.
Chart 13 Fiscal Revenues, Expenditures and Result
(% share in GDP)
Chart 14 Public Debt
(EUR bn)

-10
-8
-6
-4
-2
0
2
4
6
8
10
30
35
40
45
50
55
60
2006 2007 2008 2009 2010 2011 2012 2013 Q1
2014
Q2
Fiscal balance, rhs Primary balance, rhs
Revenues, lhs Expenditures, lhs
0
10
20
30
40
50
60
70
-1
1
3
5
7
9
11
13
Q2
2010
Q4 Q2
2011
Q4 Q2
2012
Q4 Q2
2013
Q4 Q2
2014
External, lhs
Internal, lhs
% of GDP, rhs
8
The Pace of Contraction in Bank Lending is
Slowing Down
High banking sector capitalisation due to
restrictive monetary policy and strong
prudential measures (in pre-crisis period)
Improvement in lending activity resulted from
government`s subsidized loan programme to
the coorporate sector
In 2014 banks kept high level of CAR from 2013, ending
une 2014 with 20.4%, mainly due to recapitalizations and
lower credit risk-weighted assets.
Stress tests show that Serbian banking sector is resilient to
potential negative shocks.
After a more than a year, the pace of contraction in bank
lending has softened.
Subsidized loans contributed to a mild recovery in bank
lending to enterprises (liquidity loans and loans for
financing of durable working capital). From mid May to
mid August RSD 78.2bn worth of subsidized loans was
extended.
The y-o-y growth in credit to households picked up slightly
to 4.4% in July.

Chart 15 Capitalization of the Serbian banking sector
(CAR, in %)
Chart 16 Bank Lending to Enterprises and Households
(y-o-y rates, excluding exchange rate effects, in %)

20.4
0
5
10
15
20
25
30
Q1Q2
2009
Q3Q4Q1Q2
2010
Q3Q4Q1Q2
2011
Q3Q4Q1Q2
2012
Q3Q4Q1 Q2
2013
Q3Q4Q1Q2
2014
Basel Standard (8%)
Regulatory Minimum (12%)
Introduction of Basel II
-7.6
4.4
-3.1
-0.9
-15
-10
-5
0
5
10
15
20
25
1
2010
3 5 7 9 11 1
2011
3 5 7 9 11 1
2012
3 5 7 9 11 1
2013
3 5 7 9 11 1
2014
3 5 7
Enterprises Households
Total Total*
*With the exclusion of four delicensed banks' receivables
9
Banking Sector Credibility Sustained
Household FX savings grew by more than
3.5bn since 2008
Reserve requirement policy is set to stimulate
dinar and longer-term bank funding

After a drop in Q4 2008, FX savings has been increasing. At
the end of July 2014 it stood at 8.5bn.
Good memory from 2008 (unhampered withdrawals of
savings after Lehmans collapse) contributed to rise in
savings afterwards.
Savings were unaffected by delicensing of the four banks
over last two years.
Although still low, RSD savings have doubled compared to
2012-end.
As of June 2012, RR ratios are as follows:
FX: 29% for < 2y, 22% for > 2y;
FX indexed deposits: 50% regardless of funds maturity;
RSD: 5% for < 2y, 0% for > 2y.
During January 2011 August 2014, RR allocated in FX
decreased by 967.6m, while RR allocated in dinars
increased by RSD 84.7bn.
Chart 17 Household FX Savings
(EUR bn, e.o.p.)
Chart 18 Reserve Requirement Ratios
(in %)

0
5
10
15
20
25
30
35
40
45
0
1
2
3
4
5
6
7
8
9
1
2008
4 7 10 1
2009
4 7 10 1
2010
4 7 10 1
2011
4 7 10 1
2012
4 7 10 1
2013
4 7 10 1
2014
4 7
FX savings, bn EUR, l.h.s.
LC savings, bn RSD, r.h.s.
29.0
30.0
50.0
5.0
25.0
22.0
0.0
0
10
20
30
40
50
1
2011
3 5 7 9 11 1
2012
3 5 7 9 11 1
2013
3 5 7 9 11 1
2014
3 5 7
FX <2y
Fx indexed, all maturities
RSD <2y
FX >2y
RSD >2y
10
Although Non-Performing Loans Are High,
Banking Sector is Stable
Non-performing loans are high ...but potential losses are fully covered
Main drivers of total NPL are companies in manufacturing,
trade and construction sectors and entities in bankruptcy
procedure (included in other sectors).
NPL in the households sector are significantly below the
average (10.4% in July 2014).
NBS has adopted certain regulatory measures aimed at
resolving NPL, but economic recovery dynamics and
effectiveness of legal framework will be equally important.


Gross NPLs are fully covered by balance sheet loan loss
reserves, i.e. regulatory provisions (112.0% in July 2014).
IFRS provisions cover more than half of NPL (54.3% in
July 2014).
NPL net of IFRS provisions to capital reached 34.4% in
July 2014.
Chart 19 Gross NPL ratio by sectors
(in %)

Chart 20 Gross NPL coverage ratio
(in %)

10.4
22.8
27.1
0
5
10
15
20
25
30
35
40
1
2009
3 5 7 9111
2010
3 5 7 9111
2011
3 5 7 9111
2012
3 5 7 9111
2013
3 5 7 9111
2014
3 5 7
Households
Total NPL
Corporates
Other sectors
34.9
112.0
54.3
40
60
80
100
120
140
160
Q1 Q2Q3
2009
Q4Q1 Q2Q3
2010
Q4Q1 Q2Q3
2011
Q4 Q1Q2Q3
2012
Q4Q1 Q2Q3
2013
Q4Q1Q2 7
2014
Regulatory provisions
(balance only) to gross NPL
IFRS provisions of total loans
to gross NPL
11
Banking Sector Profitability Recovered in 2014
Serbian banking sector is highly liquid Profitability is still negatively affected by high
write-offs
Liquidity ratio is far above the regulatory limit (in July 2014 it
stood at 2.6).
High share of liquid assets to total assets (37.5% in July
2014).
The loan-to-deposit ratio for the banking sector is on
conservative level (1.1 in July 2014).

In 2013 negative profitability of banking sector was driven
by 2 banks (which contributed to 50% of all banking
sector losses), one of which withdrew from the market
through the firesale of assets.
Pre-tax profit is 159 m for the first seven months of
2014 (ROE is 5.3 and ROA is 1.1).
Net interest income and net fees are key components and
drivers of operating income. Net interest margin to
average assets is stable (cca 4%).
Chart 21 Liquidity Chart 22 Profitability
(in %)

20%
25%
30%
35%
40%
45%
50%
55%
60%
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Q1Q2Q3
2009
Q4Q1Q2Q3
2010
Q4Q1Q2Q3
2011
Q4Q1Q2Q3
2012
Q4Q1Q2Q3
2013
Q4Q1Q2July
2014
Loans / Deposits (lhs)
Liuidity ratio (lhs)
Liquid assets to total assets (rhs)
1.1
2.6
37.5%
50
55
60
65
70
75
80
-2
0
2
4
6
8
10
2009 2010 2011 2012 2013 July
2014
ROE (lhs)
ROA (lhs)
Cost to income (rhs)
* Data for ROA and ROE without Agrobanka (2011) and Razvojna banka
Vojvodine (2012)
12
Large Share of Newly Extended Loans is in
Domestic Currency
Coorporate sector is relying more on domestic
bank loans
The new program of government subsidies
gave a boost to corporate loan dinarisation
from June

The outstanding amount of cross border loans is lower than
in 2010, albeit a small increase is registered in H1 2014.
A slight growth of domestic bank loans to enterprises and
stable household borrowing resulted in a small rise of the
share of coorporate and household debt in GDP.
In July 78.3% and 48.6% of new loans to households and
enterprises, respectively, were denominated in local
currency.
Still high interest rate differential contributed to the
increase in the deposit dinarization.
The Government favors local currency savings through its
tax policy and promotes the development of dinar
securities market by issuing longer-term dinar bonds.
NBS supports dinarization through its required reserves
policy.
Chart 23 Private Sector Debt in GDP*
(share in GDP)
Chart 24 Loan and Deposit Dinarisation
(share in total)

4.1
7.2
11.0
10.4
9.6
9.0 8.8
8.6 8.8
4.6
6.2
7.2
7.9
9.1
9.7
9.8
8.8
8.9
2.6
3.9
4.9
4.9
5.4
5.8
5.8
5.9
5.9
0%
20%
40%
60%
80%
100%
2006 2007 2008 2009 2010 2011 2012 2013 Q2
2014
Loans to households
Domestic loans to enterprises
Cross-borders**
* Values in white are in EUR bn
** Starting from 2012. EUR 672.1 mln and EUR 680.6mln as of March 2014 is excluded
from corporate external debt as a result of purchase transactions between two associated
29%
24%
24%
15%
20%
25%
30%
35%
1
2010
3 5 7 9 11 1
2011
3 5 7 9 11 1
2012
3 5 7 9 11 1
2013
3 5 7 9 11 1
2014
3 5 7
Loans to enterprises and households
Deposits of enterprises and households
25%
13
14
Structural slides
Compared to Pre-Crisis Period GDP Growth is
More Sustainable
Consumption-led GDP growth averaged 4.6%
in the period 2005-2008, but the trend reversed
during the crisis
GDP composition has shifted towards less
consumption and more net exports and
investments

Prior to the crisis, high capital inflows led to consumption-
based growth which resulted in increased vulnerabilities and
external imbalances.
With the first wave of the crisis, this trend reversed and
growth became slower, but more sustainable and driven by
net exports and investments.
Large scale investments in automobile and oil industry
(2011 2012) will contribute to rebalancing in the upcoming
years.

As a consequence of the crisis, the share of private
consumption in GDP is declining, bringing painful
adjustments.
Continuation of EU accession process and euro area
recovery will lead to an increase in tradable sectors FDIs,
contributing to more favorable GDP composition.
Fiscal consolidation measures and structural reforms, will
unlock growth potential by removing bottlenecks and
constraints to future growth.
Chart 25 Contributions to Real GDP Growth
(y-o-y rates, pp)
Chart 26 GDP Composition
(share in GDP)

5.4
3.6
5.4
3.8
-3.5
1.0
1.6
-1.5
2.5
-0.5
0.0
-16
-12
-8
-4
0
4
8
12
16
20
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* 2015*
NX G
I C
CII GDP
* NBS forecast
81.2% 81.7%
80.2%78.0%
77.8%
74.8% 73.6%
70.1%
-28.9%
-20.4%
-17.1%
-19.3%
-20.0%
-14.5%
-14.1%
-11.3%
-40%
-20%
0%
20%
40%
60%
80%
100%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* 2015*
C I G CII NX
* NBS forecast
15
Serbias Main Trading Partner is the EU
Serbias major export partners are the EU and
CEFTA
More than half of Serbias imports come from
the EU
Share of exports to EU-28 amounted to 66.6% of total.
Within the EU main export partners in H1 were Italy and
Germany (share of 18.9% and 12.5% of total exports,
respectively).
Serbia is a net exporter to CEFTA countries. Over two thirds
of Serbias CEFTA-bound exports go to Bosnia and
Herzegovina and Montenegro (8.2% and 4.9% of total,
respectively).
Russia is also an important export destination (6.5% of
total).

In H1, major import partners from the EU-28 were
Germany and Italy (12.1% and 12.0% of imports,
respectively).
Share of imports from EU-28 amounted to 64.0% of total.
Outside of the EU, Serbia was importing most from
Russia (10.9%) and China (7.5%).

Chart 27 Exports by Country in H1 2014
(EUR m)
Chart 28 Imports by Country in H1 2014
(EUR m)

0
200
400
600
800
1000
1200
ITA GER BH RUS ROM MNE MKD SLO
0
100
200
300
400
500
600
700
800
900
1000
GER ITA RUS CHN POL HUN AUT
16
17
Appendix
18
Chart 29 Contributions of CPI Components to y-o-y Inflation
(y-o-y rates, pp)

In the last year y-o-y inflation fell by 5.8pp of which -2.2pp (around 37%) is attributable to food prices.
Core inflation, which is the persistent part of the inflation, shows low inflationary pressures since the beginning
of the year.
Waning Disinflationary Impact of Food Prices
0.2
0.8
0.7
0.0
-0.2
1.5
-4
0
4
8
12
16
1
2010
2 3 4 5 6 7 8 9 101112 1
2011
2 3 4 5 6 7 8 9 101112 1
2012
2 3 4 5 6 7 8 9 10 1112 1
2013
2 3 4 5 6 7 8 9 101112 1
2014
2 3 4 5 6 7 8
Energy Services Industrial products excl. food and energy
Processed food Unprosessed food CPI Inflation
Tolerance Band Inflation Target
19
Serbias Economic Outlook
2008 2009 2010 2011 2012 2013 2014 2015
Real GDP, y-o-y % 3.8 -3.5 1.0 1.6 -1.5 2.5 -0.5 0.0
Consumption, y-o-y % 6.7 -2.8 -0.9 -1.1 -1.8 -1.5 -2.1 -4.7
Investment,
1
y-o-y % 16.1 -23.3 -6.8 12.6 15.8 -2.2 1.5 8.0
Government, y-o-y % -0.2 -4.6 0.3 -0.4 2.6 -6.9 1.7 -3.2
Exports, y-o-y % 9.8 -8.0 15.3 3.4 1.8 16.6 5.8 7.5
Imports, y-o-y % 9.6 -19.1 3.1 7.0 1.9 2.0 3.5 1.1
Unemployment Rate, %
4
13.6 16.1 19.2 23.0 23.9 22.1 21.0 21.5
Real Wages, y-o-y % 5.6 0.8 1.0 0.2 1.1 -0.6 -1.0 -2.9
Money Supply (M3), y-o-y % 9.8 21.5 12.9 10.3 9.4 4.6 - -
CPI,
2
y-o-y % 8.6 6.6 10.3 7.0 12.2 2.2
National Bank of Serbia Repo Rate,
3
% 17.8 9.5 11.5 9.75 11.25 9.5 n/a n/a
Current Account Deficit BPM-5 (% of GDP) 21.6 6.6 6.7 9.1 10.7 5.0 - -
Current Account Deficit BPM-6 (% of GDP) - - 7.4 10.5 12.3 6.5 5.9 3.8
General Government Deficit (% of GDP) 2.6 4.5 4.7 4.9 6.5 5.0 5.5
5
4.2
5
Augmented Fiscal Deficit
6
(% of GDP) - - - - 7.5 5.9 7.1
5
5.2
5
4
Labor Force Survey
5
MoF Fiscal Strategy (2013)
6
Includes below-the-line items, MoF data
Excluding the ef f ect of change in inventories
Inf lation f igures in the table represent Dec on Dec inf lation: (Pt/Pt-12)*100-100
End of period data
Chart 2
Serbia
NBS Forecast
20
Banking Sector Overview
2008 2009 2010 2011
Number of banks 34 34 33 33 32 * 30* 29*
Employees 32,342 31,182 29,887 29,228 28,394 26,380 25,502
Branches 2,734 2,635 2,487 2,383 2,243 1,989 1,850
HHI Assets 627 636 629 664 678 741 776
Share of foreign banks, % 75.3 74.3 73.5 74.1 75.2 74.3 74.9
Assets (net), EUR m 20,056 22,530 24,015 25,211 25,322 24,827 24,704
Capital, EUR m 4,740 4,667 4,720 5,104 5,198 5,186 5,249
Loans (gross), EUR m 13,071 13,404 15,324 17,204 17,273 16,140 16,144
Of which gross NPL, EUR m 1,474 2,103 2,592 3,275 3,217 3,448 3,681
Gross NPL ratio, % 11.3 15.7 16.9 19.0 18.6 21.4 22.8
Deposits, EUR m 11,565 13,570 14,263 14,584 14,936 15,067 15,125
Pretax Income, EUR m 392 209 241 296** 230*** -18 159
CAR, % 21.9 21.4 19.9 19.1 19.9 20.9 20.4****
Liquidity Ratio 1.8 1.9 2.0 2.2 2.1 2.4 2.6
FX ratio, % 7.4 3.6 3.9 6.2 5.5 4.4 2.6
ROA, % 2.08 1.02 1.08 1.23** 0.97*** -0.07 1.12
ROE, % 9.27 4.62 5.37 6.04** 4.65*** -0.36 5.29
NIM
1
, % 5.4 5.1 4.6 4.6 4.3 4.2 4.2
1
NIM to average total asset
***** last available data June 2014
** with Agrobanka: Pretax Income 12.0m , ROA 0.05, ROE 0.24
*** with Razvojna banka Vojvodina: Pretax Income 102.5m, ROA 0.43, ROE 2.05
Serbia
2012 2013
July
2014
* the National Bank of Serbia revoked Nova Agrobanka's operating licence on 27 October 2012, on 6 April 2013 the National Bank of Serbia revoked operating licence to Razvojna
banka Vojvodine , to Privredna banka Beograd on 26 October 2013 and Univerzal banka Beograd in January 2014