The Importance of the Free Trade Zones to Serbian Economy

The new study by Libek shows the impact the existing Free Trade Zones have to the Serbian economy and the success of the model in the 22 years of implementation.

According to the study, which analyzes the performance of the 14 Free Trade Zones in Serbia, the Free Trade Zones employed 25000 employees in 2016 and their share in exports of Serbia was 16.5%. The data shows that a 10% increase in productivity of the Free Trade Zones would lead to an 0.7% increase in the GDP of Serbia.

Although there have been improvements in the way the Free Trade Zones work and their regulation, they remain burdened with regulation and taxes similar to the obstacles other companies in Serbia experience.

The economic output of the Free Trade Zones grew especially in the past 10 years. Since 2008, the zones grw 4.5 times, and investments increased six times. The growth of turnover, exports and production was even greater than that. If the production of the whole country grew at the same speed, Serbian GDP in 2016 would have been 316 billion US Dollars, or 44500 US Dollars per capita, which would be among the highest in Europe, between Sweden and Denmark.

The study shows that the Free Trade Zones model has worked for the Serbian economy, but that it would be even better if the burden on the companies working in them was reduced further, and that best practices from them would be applied in national policies.

The whole study is available here.