China’s presence in the Serbian market is expanding rapidly, bringing it close to Germany as Serbia’s leading trade partner, while Russia has fallen out of the top five. Data from the first seven months of this year reveals that Serbia’s total trade in goods reached just over 39 billion euros. Exports amounted to 17 billion euros, a modest increase from the same period last year, while imports totaled 22.3 billion euros, reflecting a 4% rise. This has resulted in a trade deficit of slightly more than 5 billion euros.
In terms of exports, the top trading partners are Germany, Bosnia and Herzegovina, Italy, China and Hungary. For imports, Germany, China, Italy, Turkey and Hungary are the leading partners. Notably, China is now very close to Germany in trade figures. In the first seven months, Serbia imported nearly 3 billion euros worth of goods from Germany and 2.91 billion euros from China, following the implementation of the Free Trade Agreement in July.
Russia, once a major player in Serbia’s foreign trade due to its gas and oil exports, has dropped out of the top five foreign trade partners since April this year.
Regarding exports, Vojvodina leads with 33.9% of Serbia’s total, followed by Belgrade with 23.4%, Southern and Eastern Serbia with 21.3%, and Šumadija and Western Serbia with 20.2%. For imports, Belgrade accounts for 44.3%, Vojvodina 32.5%, and Šumadija and Western Serbia 13.6%.
In July, imports rose compared to the previous month, largely due to increased oil and electricity imports driven by high summer temperatures. Key imported products included copper, concentrates, and generator sets, reflecting heightened oil consumption.
Trade with countries that have free trade agreements with Serbia, especially EU nations and CEFTA countries, remains the most significant.
Long-term agreement with China
Vesna Lepčić, editor of the All About Money portal, attributes China’s increasing proximity to Germany as Serbia’s leading trade partner to the Free Trade Agreement signed in July. She notes that while the agreement may be producing early results, the full impact will be seen over time as customs rates are gradually reduced.
Lepčić explains that the increase in Chinese market share is expected due to the growth in Chinese exports globally. Serbian exports to China, primarily raw materials like copper, are currently dominated by these products. However, there is potential for growth in other sectors, such as meat, alcoholic beverages, and fruits.
Despite the potential, Lepčić warns against over-optimism, noting that Serbia imports significantly more beef than it exports, highlighting a trade imbalance in some areas.
Sector performance and challenges
Analyzing the first seven months of trade data, Lepčić notes a 14% increase in the foreign trade deficit and a decrease in the import-to-export coverage ratio by about two percentage points. Positive results were observed in sectors like the food industry and primary agriculture production. However, the growing imports of oil, oil derivatives, and electricity have contributed to the trade deficit.
Lepčić points out that the high summer temperatures and dry conditions led to reduced hydropower production, exacerbating the trade imbalance. The impact of these factors on the foreign trade balance will be felt in the coming months, particularly with the ongoing consequences of the 2021 TENT power plant accident.
Regarding regional trade data, Lepčić highlights ongoing efforts to boost development and investment in less developed areas of Serbia. While traditional industrial regions like Belgrade and Vojvodina remain prominent, new investments are being directed to other regions to balance industrial development across the country.
