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The Serbian government has recently approved an action plan for implementing the Strategy of Industrial Policy, which outlines key activities and measures planned for this year and the next. The overarching goal is to drive the Republic of Serbia towards a highly competitive economy through research, development, innovations, and entrepreneurial initiatives in areas defined by the Smart Specialization Strategy.
A significant portion of the budget is allocated to attracting investments, with plans to allocate 23 billion dinars in 2024 and 24 billion dinars in 2025 for the purpose. These investments are deemed “Investments of Special Importance.”
The action plan for 2024 and 2025 includes reviews of implemented measures and introduces new activities in five areas. These include digitalization, incorporating artificial intelligence projects, and a green transition, which are expected to be key drivers for boosting industrial competitiveness.
The focus on attracting investments likely stems from an analysis of the previous action plan’s effects, which showed investments from 2018 to 2022 were crucial for economic growth. In 2022, total investments contributed 24.2% to the GDP, with a substantial inflow of foreign direct investments (FDI) continuing into 2023, amounting to €4.22 billion.
Most investments were directed towards the manufacturing sector, construction, mining, and professional, scientific, innovative, and technical activities. Notably, four-fifths of the FDI was in the form of equity capital and reinvested earnings, underscoring foreign investors’ commitment to continuing their investments in Serbia.
The new action plan also emphasizes the enhancement of incentive systems’ effectiveness and further development of support for low-value-added industries in certain regions. It includes infrastructure development projects to equip new industrial zones and revitalize old ones, with the Serbian Development Agency playing a pivotal role in promoting Serbia as an attractive investment location.
For 2024, 19 billion out of the allocated 23 billion dinars are planned for fostering investment in industrial production, with the rest earmarked for supporting higher-value product investments and potential research, development, and innovation areas.
Next year, each of these activities will receive an additional 500 million dinars, signifying ongoing commitment to regional development and business infrastructure support. The plans also feature continued efforts in digital transformation, artificial intelligence project integration, and fostering collaborations between traditional industries and innovative solution providers.
