During the entire 2002, socio-economic trends in the Republic of Serbia were characterized by active commitment to implement reforms, necessary to step up the transition process. According to the assessment of the European Bank for Reconstruction and Development (EBRD), Serbia and Montenegro recorded greater progress in implementation of reforms than the other 27 East European countries. In its report on transition, EBRD graded Serbia and Montenegro 3+ (scale 1 - 4) for its foreign trade policy, for the process of privatization of small enterprises, and for price liberalization.

The current state of global economy, especially EU, as the main Serbian trading partner, and the forecasts that a stronger growth rate or stabilization in global economy is not to be expected until 2004, creates great difficulties for the recovery of the national economy.

Governments of most East European and CIS countries (Community of Independent States) reduced their growth rate forecasts for this year, even though their expectations as regards economic movements in 2003 are still optimistic.

Based on the Memorandum on Budget and Economic and Fiscal Policy, it is estimated that real growth in GDP could be around 3.5% in 2003. A stronger real growth in GDP is not to be expected before 2004 (at an average growth rate of around 5%), which also depends on positive trends in global economy, and especially in EU and East European countries.

Economic trends in Serbia in the first four months of 2003 are characterized by a slowdown in economic activity, however together with stabilization of prices, real increase in salaries and growth in foreign trade.

Physical volume of industrial production in the period Jan-Apr 2003 decreased by 4% in relation to Jan-Apr 2002. If viewed by sectors, growth in output was achieved in mining and quarrying 0.9%, and in electricity, gas and water supply 4.1%; decrease in output was recorded in manufacturing industry 6.9%.

However, physical volume of industrial production in April 2003 increased by 2.3% in relation to the previous month, which indicates that together with efficient implementation of short-term measures for boosting production (restructuring, privatization, crediting export-development programs, etc.), industrial production could reach the level from 2002 in a few months period.

Exports of goods in period January - April 2003 increased by 33.5%, and imports increased by 28.6% in relation to the same period of 2002. If compared to April 2002, exports of goods increased by 7.0%, and imports increased by 2.8%.

Exports in EU countries in period January - April 2003 increased by 40.2% in relation to the same period of 2002.

The coverage of imports with exports in April 2003 is 41.9%.

Prices in May 2003 increased by 0.5% in relation to April, and costs of living by 0.4%. Aggregate increase in retail prices in this year (in relation to Dec 2002) is 3.0%, and in costs of living 2.5%. Producers' prices in industry recorded exceptionally stable movements in the first four months of 2003, so that in April 2003 they increased only by 1% in relation to December.

The total number of employed persons at the end of March 2003 amounted to 1,782,841, which means it decreased by 0.8% compared to February 2003, or by 4.5% compared to March last year.

According to the data from the Republican Labor Market Bureau, the number of persons seeking employment was 947,426 at the end of April 2003, which means the number increased by 0.2% compared to March, and 17.7% in relation to April 2002.

Net earnings, contributions and taxes excluded, reached the amount of 11,148 dinars in April (in economic 10,329, and in non-economic activities 13,528 dinars), which is a nominal 10.1% increase and real 9.2% in relation to the previous month.

At the end of April 2003, money supply M1 amounted to 111,416 million dinars - it was increased by 3.3% in relation to the previous month, however it was slightly decreased in relation to December 2002 (by 0.2%). The cover of monetary aggregate M1 by NBS foreign currency reserves was relatively high at the end of April, and in relation to the end of 2002 it increased from 120.5% to 127.0%.

In 2003 (up to 20 May), 336 enterprises were privatized at tenders and auctions, which pulled in EUR 159.5 million; EUR 117.4 million were provided for investing and EUR 30.1 million for social welfare.

Shares of 40 companies from the Share Fund portfolio were sold and amount of EUR 15.4 million was realized.

The process of restructuring was started in 73 large economic systems, so that they can undergo the procedure of selling socially-owned capital of the whole or of the part of the enterprise, at public auctions or public tenders. In the course of 2002, all public enterprises made their strategic development programs, and the Serbian Government adopted the Strategic Development Plans from 2003 to 2005 for two public enterprises: PE EPS and PE JAT.

At the beginning of 2003, the Serbian government adopted the Strategy for Development of SMEs and Entrepreneurship in Serbia from 2003-2008. In 2002, the Serbian Fund for Development approved one billion dinars for 160 programs in undeveloped areas were, which is 13.2% of the sum total approved by the Fund.

At the April session in 2003, 185.6 mil.din were approved for 20 programs in undeveloped areas, which is 19.4% of all approved long-term programs.

The Serbian Government is preparing the Poverty Reduction Strategy (PRS) . In Serbia, according to the data collected in a survey, 10.6% of population has fallen below the poverty line (4,489 dinars per month per member of a household).

The analysis of economic development in Serbia shows that the most developed municipality is Apatin (with the level of development 85% above average in Serbia), and the most undeveloped municipality is Tutin (with the level of development 76% below the average in Serbia). Apart from Belgrade, the South-Backi District is the largest economic center (participating with 11% in total number of enterprises, 9.3% in employment, makes 19.1% of revenues and 14.1% of profits in Serbia, and makes 7.4% of losses in Serbia) and newly depressed areas are Kragujevac (56%), Majdanpek (51%) and Pozarevac (30% of per capita income in Serbia

Source: Web Site of Serbian Government and Republic Development Bureau