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Global Competitiveness Report 2018 – Serbia Makes Progress Owing to More Favourable Macroeconomic Environment and Financial Stability

According to the Global Competitiveness Report 2018 of the World Economic Forum, Serbia has improved its competitive position for the third year in a row. It currently takes the 65th place among 140 countries. As in 2017, progress was achieved under the Macroeconomic stability pillar within both pillar indicators – inflation and debt dynamics. In terms of inflation, Serbia kept the first position, shared with 73 countries. Serbia’s best achievement in this regard is the average annual inflation rate between 0.5% and 4.0% given that deflation is considered equally detrimental as high inflation. In terms of debt dynamics, Serbia’s position improved owing to the public debt reduction below 60% of GDP and the credit rating upgrade.

Serbia made considerable progress within the Financial system pillar as well. According to financial system stability indicators, improvements were made as to the soundness of banks, as a result of the NBS macroprudential policy and preserved financial stability. The non-performing loans indicator also improved, thanks to comprehensive measures undertaken to resolve this issue. With the capital adequacy ratio of over 20%, Serbia applies best world practice, sharing the first place with another 71 countries. In terms of the credit gap indicator, Serbia holds the first position with 96 countries given that credit growth is still below a long-term trend, i.e. it is not excessive and threatening to financial stability. According to financial system depth indicators, Serbia recorded progress in terms of SMEs financing and venture capital availability.   

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