Serbia Highlights the Strategic Role of Industrial Policy in Economic Growth

At a recent event presenting the latest Transition Report, Serbia’s central bank reaffirmed the importance of industrial policy for sustained economic development amid shifting global dynamics and mounting challenges. The speech centered on how the country is leveraging targeted interventions to modernize its industries and position itself for long-term growth.

The governor emphasized that modern industrial policies, once mainly used by developed economies, have become critical tools for emerging markets like Serbia, particularly in response to the disruptions brought by the pandemic, geopolitical tensions, and the necessity for climate and technological transitions. Serbia's approach includes incentives for high-value manufacturing, widespread investment in digitalization, new technological parks, and support for entrepreneurship, especially among small and medium-sized enterprises.

Infrastructure improvements are intentionally being deployed to address regional disparities, with a noted increase in employment in underdeveloped areas due to free economic zones and connectivity projects. The government’s broader strategy encompasses both energy transition initiatives and robust programs to foster innovation, export growth, and administrative digitalization, all helping to nurture a more competitive, knowledge-based economy.

Serbia’s strong macroeconomic performance underscores these policies: the country recorded one of the highest GDP growth rates in Europe at 3.9% for 2024, with historic highs in both foreign exchange and gold reserves. Unemployment dropped to a new low of 8.6%, and foreign direct investment continued to rise, especially in manufacturing. Further progress was marked by Serbia achieving an investment-grade credit rating and the inclusion of its government bonds in a major global index.

The speech concluded by reinforcing the link between economic stability and inclusive growth, noting that sustained reforms and solid political foundations are essential to bridging regional inequalities and maintaining the country’s upward trajectory. These strategies, officials argue, are building resilience and opportunity for Serbia within an increasingly complex and competitive global landscape.

This focus on resilient, forward-looking industrial policy signals Serbia’s commitment to long-term prosperity and regional cohesion in a rapidly evolving economic environment.