By the year-end, exports from Serbia will be somewhat lower than expected due to the crisis and recession in the largest EU economies. Thus, the revised 2024 budget adjusted total export growth from 8.1% to 5.8%. However, not all is lost; the start of mass production of the electric Fiat Grande Panda in Kragujevac could somewhat offset that loss.
As stated in the revised 2024 budget, which was adopted on Monday by the Serbian Parliament, lower export growth is expected due to the continued weak performance of the manufacturing industries of Serbia’s key trading partners, Germany and Italy. Additionally, import activity is expected to grow faster than export activity, due to a strong rise in investment and equipment imports, as well as increased imports of consumer goods driven by higher household consumption.
However, Ivan Nikolić, editor of Macroeconomic Analyses and Trends and director of development projects at the Economic Institute, points out that when considering the future trend of foreign trade, the start of production of Stellantis’ “Grande Panda” in Kragujevac must be taken into account, which is expected to happen in the last quarter of the year. This could potentially offset the expected decline in trade with Italy.
“As soon as electric vehicle production starts in Kragujevac, which is expected by the end of the year, all that export will go to Italy, and then beyond. This will significantly improve trade with Italy,” Nikolić told Bloomberg Adria.
China and Turkey offset declining exports to the EU
Germany remains Serbia’s main trading partner for now, but China and Turkey are rapidly catching up. In the first eight months of this year, China became the third-largest export market for Serbia, and the second for imports.
Serbia’s foreign trade in goods with the world increased by 3.5% in the first eight months of 2023 compared to the same period in 2023, totalling approximately €44.8 billion, according to the latest data from the Serbian Statistical Office (RZS). Germany remains the top trading partner, with €2.9 billion worth of goods exported to Germany and imports valued at €3.4 billion.
“Despite recessionary pressures from Europe, Serbia is still maintaining relatively high growth in both economic activity and foreign trade,” Nikolić emphasized.
The authors of MAT concluded that Serbia’s overall foreign trade value has seen the most significant increases with China and Turkey since the start of the year. Serbian exports to China rose by 52% (€337 million) in the first seven months, and exports to Turkey by 64.4% (€196 million).
“Serbia found an alternative in the Chinese and Turkish markets for the subdued demand from the EU. Without this shift, Serbian goods exports in the first seven months would not have grown by 1.3%, but would have fallen by 1.9%. The entire positive result is owed to these two countries. Goods exports would have been about half a billion euros lower,” Nikolić stressed.
Copper tops exports to China
Refined copper, copper ore, and concentrates, valued at approximately $330 million in July and August, were the top three export products. With the Free Trade Agreement with China coming into force on July 1, questions arise about how much this agreement contributed to the rise in copper exports, which are mostly shipped to China.
Imports still outpacing exports
According to the latest statistical data, from the beginning of the year to the end of August, Serbia’s goods exports were valued at €19.4 billion, a 1.5% increase compared to the same period in 2023. Imports totaled around €25.5 billion, a 5.1% increase. As a result, the foreign trade deficit stands at approximately €6.1 billion, an 18.3% increase.
Furthermore, the 2024 budget revision highlights that the largest increases in the manufacturing sector were registered in exports of basic metals (41%) and other transportation equipment (53.8%), as well as in the metal industry (10.9%) and electronics industry (29.3%). In addition to manufacturing, a significant positive contribution to export growth was also seen in agriculture, with exports up by 45.4%, thanks to last year’s strong agricultural season.
(Bloomberg Adria, 02.10.2024)
https://rs.bloombergadria.com/ekonomija/srbija/67463/stellantis-i-linglong-bi-mogli-da-sacuvaju-srpski-izvoz-od-pada/news/
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Publish date : 2024-10-02 02:15:00
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