Serbia: Country Context
Switzerland supports stability, prosperity, and Serbia’s path toward European integration since many years, gradually shifting its engagement from humanitarian aid to long‑term assistance for democratic, economic, and energy reforms. Serbia remains a central actor in the Western Balkans. Despite maintaining EU accession as a strategic priority, the country faces growing political and social polarization and ongoing challenges in rule of law, transparency, corruption, and media freedom.
Economic progress over the last years is impressive (GDP growth in 2023 3.9%) but masks the fact that the performance remains below its potential to move Serbia to the next level. The growth model relies on investment from abroad and on public expenditure. Serbia pursues an active trade agenda that opens new market access for its companies. However, foreign investment is often directed to low added-value sectors and profit outflows increasingly offset new investments, raising questions about the sustainability of the growth model. Especially local SMEs face an uneven level playing field in relation to foreign companies and state-owned enterprises. The private sector is still facing many administrative hurdles that restrain international competitiveness and domestic investment. Public investment management could be improved in view of transparency and accountability. Overall, important structural reforms are delayed, and economic benefits are unevenly distributed among the population and regions. Unemployment is on a record low (8.6%), but many companies are struggling to find adequately skilled labor force. While demographic trends are negative and brain-drain and activation of youth remain a challenge, Serbia became for the first time in 2024 a country of net immigration (100’000 foreign immigrants, mostly temporary labor, versus 50’000 emigrants).
Serbia has made progress on environmental issues by aligning with the EU Green Deal and ratifying key environmental agreements. Following the conflict in Ukraine, diversifying and decarbonising energy sources became even higher priorities. As a result, the government placed energy efficiency and the transition to cleaner energy at the center of its national strategies. However, long-term sustainability efforts should also include continued attention to biodiversity, environmental protection, and ecosystem resilience, along with steady improvements in implementation and enforcement capacities.
With more than 600 Swiss companies operating in the country, generating approx. 14’000 jobs, Serbia is also economically relevant for Switzerland. The Swiss engagement in Serbia is in line with Swiss foreign economic policy strategy as it promotes the resilience of developing countries and emerging markets. Moreover, Serbia and Switzerland belong to the same constituency group within the Bretton Woods institutions and the EBRD. Finally, a sizable Serbian diaspora (more than 57’000 persons) is present in Switzerland that contributes to the Swiss economy and to the cultural ties between both countries.
After the EU and Germany, Switzerland is the 3rd largest bilateral donor in grants.