Real sector. Physical volume of industrial output, in March 2008, increased by 2.6 per cent over that in the same period in 2007, and by 2.6 per cent over the previous month. In the first quarter of 2008 industrial production increased by 6 per cent over the same period in 2007. This rise was largely due to sectors such as power generation, manufacturing of chemicals and chemical products, production of electrical machinery and appliances and basic metals production.
The tendency of increased retail sales has continued – in the first quarter of 2008 compared to the same period last year they nominally increased by 22.9 per cent while, in real terms, they increased by 8.6 per cent .
Demand, wages and prices. The average net wages and salaries in March amounted to RSD 30,809 (they were nominally lower by 0.6 per cent while, in real terms, by 2.1 per cent compared to the previous month). Wages and salaries increased in real terms by 5.4 per cent in the first quarter of 2008 compared to the same period last year.
During the first three months of 2008 the total number of employed declined by 0.7 per cent compared to the same period last year, while the number of employed in companies, institutions and organizations declined by 1.2 per cent. According to the statistics of the National Employment Office there were 858,366 job-seekers at the end of March 2008, which is 0.2 per cent drop on February 2008 and 13.9 per cent drop on March 2007. Of these, 795,081 were active jobseekers, which is by 0.1 per cent less compared to February and by 12.9 per cent compared to March 2007.
In January-April 2008 period, the situation at goods and services market has been marked by the growth of retail prices above the envisaged level followed by the growth of inflation above the expected level. Retail prices during the first four months in 2008 went up by 3.9 per cent (December 2007/April 2008), while annual inflation was 12.0 per cent in the period April 2007/April 2008. Structurally, in the period January-April 2008 the major price increase was recorded in the field of agricultural products (17.7 per cent), industrial and food products (6 per cent), beverages (4.4 per cent), while the prices of industrial products and food were below the average levels (3.4 per cent).
Monetary policy. In the first quarter of 2008 monetary policy retained its restrictive nature. Main monetary aggregates recorded fall in the first three months of 2008 compared to the values in December 2007, however they record annual high growth rates.
Public revenues. In January-February 2008 period, the distribution of public revenues and earnings amounted to RSD 207 billion and they are 18.7 per cent higher in nominal terms, i.e. 6.9 per cent in real terms, than in the same period in 2007. According to the Ministry of Finance, in the January-March 2008 period the budget receipts of the Republic of Serbia amounted to RSD 152.6 billion, while expenditures were RSD 138.7 billion, and budget surplus was RSD 13.9 billion.
Foreign economic relations. Total foreign trade in January-March 2008 amounted to US$ 7.9 billion, which is 38.5 per cent higher than in the same period last year. Exports increased by 37.6 per cent and imports by 39 per cent. Foreign trade deficit stands at US$ 2.9 billion, and is 40.2 per cent higher than in the period January-March 2007. The principal foreign trade partners are still Italy, Bosnia and Herzegovina and Germany; while Serbia’s main imports come from the Russian Federation, Germany and Italy. Import-export ratio is 46.2 per cent and it is by 0.4 per cent less than in the first quarter of 2007.
Privatization. In 2008 (until 20 April) 57 companies were sold through tenders or auctions securing an income of EUR 118.8 million for investment. The largest income (EUR 81.5 million or 68.6 per cent of income from tender and auction privatization) came from the privatization of the following seven companies: Jugotehna, Splendid Hotel, Dunav, David Pajic Daka, Excelsior Hotel, Zobnatica, PTT Catering.
In January-April 2008 period, the Share/ Stock Fund sold the minority block of shares of 116 companies bringing in total EUR 31 million in privatization income. Foreign buyers participated in the purchase of the minority block of shares of six companies: Malineks from Backa Palanka, Fasil from Arilje, Montinvest from Belgrade, Senta from Senta, Poliester from Priboj and Trudbenik from Vrsac.
In April 2008, the Development Fund approved credits for 89 long-term investment programmes in the amount of RSD 946.1 million for 46 municipalities. Upon the realization of these programmes, 811 new jobs are to be created. The largest sum of the approved credit funds is allocated to the production of mineral-based products and those of other raw materials (RSD 218 million for 4 programmes), and subsequently to the production of agricultural products, beverages and tobacco (RSD 177 million for 22 programmes) and the production of machineries, metal and metal products (RSD 154.9 million for 9 programmes).
Conjuncture perspectives. On the basis of the results of a research conducted by the Republican Development Agency (RDA) on business climate (following ordinary monthly surveys and opinion), businessmen in industrial sector have made ever more unfavourable assessment of current business situation during the last couple of months. However, an optimism still prevails in view of the business expectations in the coming six months. It should be underlined in particular, the expectations of industrial companies that the number of workers in production will be increased. The RDA index for business climate in March 2008 is below the average value, and it recorded a fall by 10 points compared to March 2007. The highest RDA index of business climate was recorded among the producers of non-durable consumers goods. However, there are still significant constraints in the operation of industrial firms. The largest number of manufacturers (25 per cent) emphasized that the major constraint in their operation is the insufficient demand. As regards the supply, 24 per cent of companies are faced with the lack of financial resources while 18 per cent of them have problems with low prices and 13 per cent of manufactures consider the lack of equipment as their main constraint. Only 8 per cent of interviewed businessmen have no business constraints.