Why has the food industry in Serbia fallen behind?

There has been an overall growth in industrial production in Serbia, except for the manufacturing industry. Economists point in particular to the recession in the food, automotive and steel industry. Interestingly, despite the decline in production, exports of these three problematic economic branches are still on the rise.

The overall performance in industrial production would have been even better if it had not been for the food industry, which has halved the total output of the manufacturing industry. Even economists do not know the answer as to why this happened.

“Last summer, the meat industry started to decline after it had grown steadily in 2018 and early 2019. At first, we thought it was because of the swine flu, but it wasn’t. The main and fundamental reason is that, as far as I know, we have only one producer that is accepted abroad,” says Stojan Stamenkovic from MAT (Macroeconomic Analyses and Trends) magazine.

The Ministry of Economy sees the reasons for the slowdown in the tax that Kosovo has been applying to Serbian goods, but also because of the decrease in demand in the global market, as well as the mandatory overhaul of petrochemical and oil plants.

“The food industry is one of the four economic branches that have received the biggest loans. Today, on the one hand, we have a good and clean technology with which we can satisfy serious and demanding markets, as well as good capacity when it comes to cold storage,” says Dragan Stevanovic, Secretary of State at the Ministry of Economy.

Some of the big exporters and importers say that, despite the great competition in the confectionery sector, they ended 2019 on a positive note. This was due to the consolidation completed on time, disinvesting in less promising production programmes and favouring recognizable products.

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Vladimir Cupic, director of Atlantic Group in Serbia, says that growth between 3% and 4% is expected. “The good thing is that the state incentives and subsidies for the food industry are considerably relaxed and can amount up to 20% of investments. I think this is a significant factor and its effects will be felt in the coming years,” Cupic said.

Even though the food industry has been labelled as responsible for the poor performance of the manufacturing industry, it is still among the top exporters.

After years of recording a deficit in trading with Croatia, things have changed for Croatia. In the first 11 months of last year, the total trade between the two countries amounted to 1.6 billion euro, an increase of 1.7%. The surplus on Serbia’s side was 50.6 million euro.

“The good thing is that we have been able to generate a surplus in a market that is part of the EU. I am obviously talking about Croatia and I think that these trends and the trend in this context will not really change, especially in the spirit of the economic policy that we want to implement for the next five or ten years through the Serbia 2025 programme,” says Stevanovic.

Better results are certainly expected in the automotive sector too, as Fiat has resumed production after the Christmas and New Year holidays, with the Italian press confirming that a new model will be produced in Kragujevac.

(Kamatica, 29.01.2020)


This post is also available in: Italiano

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