Due to IMF-supervised macroeconomic stability, strong foreign direct investment inflows and export competitiveness the fundamentals of the Serbian economy remain relatively strong. Primarily due to our expectation for a credit crunch in 2012, we have revised down Serbia's real GDP growth forecasts for 2012 and 2013. The economy is now set to expand by 0.6% and 1.7% respectively, conversely from 1.9% and 3.2% previously expected. The country is, however, much better positioned to face a recession in the eurozone than it was in 2009.
Headline Industry Data (local currency)
- 2012 per capita food consumption: +2.9%; forecast to 2016: +18.6%
- 2012 alcoholic drinks value sales: +2.6%; forecast to 2016: +17.2%
- 2012 soft drinks value sales: +14.8%; forecast to 2016: +104.3%
- 2012 mass grocery retail sales: +6.7%; forecast to 2016: +43.4%
Key Industry Trends
FrieslandCampina Acquires Serbian Dairies: In early 2012, Dutch dairy producer
FrieslandCampina entered an agreement to acquire Serbia-based dairies Imlek and Mlekara Subotica from private equity firm Salford Capital Partners. FrieslandCampina is to purchase a 79% stake in Imlek and an 82% stake in Mlekara Subotica. The combined annual turnover of both dairies is about EUR270mn (US$354.2mn). The acquisitions, part of FrieslandCampina's 'route2020' strategy, will enhance the global position of the Dutch producer in dairy-based beverages, infant nutrition and branded cheese.
Delhaize Restructures Serbian Network: In early 2012, Belgian retailer Delhaize's subsidiary in Serbia announced plans to create 600 new jobs as it restructures its store network. The company will open 20 new stores in Serbian cities, close seven of its unprofitable Mini Maxi outlets and rebrand 40 others; the Tempo Express format is to be turned into Maxi stores. According to the retailer, closing unprofitable stores while opening new ones will save the company money, which Delhaize Serbia plans to reinvest in the local market.
Key Risks To Outlook
Slowdown In External Demand: Serbia remains heavily dependent on Europe for trade, remittances, investment and funding. Aside from the risks stemming from the banking sector, we have been warning about the exposure that Serbia has to the crisis in the eurozone through its large export dependency on the common currency bloc.