Deception is one of the main levers of governance of the current authorities, and each new day represents an additional cost on our already substantial account of delusions. This government does not give it up, nor will it. Thus, at the BELTALKS: Belgrade Economic Talks forum on 9 December, Finance Minister Siniša Mali stated: “If you look at gross domestic product per capita in Serbia, it was around 4,800 euros in 2012, and now it is 15,800, give or take, so it has more than doubled.”
As usual, the minister manipulates nominal GDP, which includes the effect of inflation, so it may happen that nominal GDP grows simply because prices are rising, even though the physical volume of production has not changed. It is even possible for nominal GDP to increase while production is declining, if the rise in the general price level is strong enough.
For this reason, the key indicator in the analysis of economic growth is real GDP, which measures changes in an economy’s productive capacity. It is obtained by choosing a base year, taking prices from that year and using them to express the value of production in all other years. Since prices are frozen, real GDP reflects exclusively changes in the quantities of goods and services produced, that is, a decline or increase in productive capacity.
The finance minister pulls one way, the IMF another
No less important, the so-called catch-up effect must be taken into account, which implies that economies starting from a lower level of development grow faster, because in their case each additional unit of investment leads to a relatively greater increase in productivity and output.
According to IMF data, in 2012 Serbia’s nominal GDP per capita amounted to around 6,300 dollars or, at the average exchange rate of that year, 4,850 euros. Thus, this part of the finance minister’s presentation is in line with official data. However, nominal GDP per capita for 2025, instead of 15,800 euros as cited by the finance minister, is estimated by the IMF at 15,300 dollars, or 13,500 euros at this year’s average exchange rate. In this way, Minister Mali overestimated this indicator by almost 20 per cent.
The essence, however, is that fluctuations in nominal GDP are not representative, because it is possible for one economy to grow faster than another simply due to higher inflation, and not because of a faster increase in real productive capacity. Therefore, it is crucial to focus on movements in real GDP and, consequently, on the finance minister’s claim at the same forum that Serbia recorded the fourth fastest growth rate of GDP per capita in Europe during the period of the current government. “I think Ireland was number one, then Romania and I think Bulgaria,” Mali said.
For this purpose, we use Eurostat data and note that in October 2024. the Statistical Office of the Republic of Serbia carried out the third major GDP revision in the past ten years which, in the opinion of the Fiscal Council of the Republic of Serbia, calls into question the quality of the resulting data, because the GDP level was significantly increased, by five to seven per cent per revision, which are not common changes in other European countries.
Nevertheless, despite this dubious revision, and contrary to the claims of the finance minister, Serbia is not in fourth but in ninth place in Europe in terms of the growth rate of real GDP per capita, as it has cumulatively increased by 49.6 per cent over 12 years, as can also be seen in chart number 1. However, contrary to the expected catch-up effect, during the observed period ,Serbia is preceded by Ireland with a cumulative GDP per capita growth rate of 100.7 per cent, followed by Malta (61.2), Lithuania (53.5), Poland (51.9), Croatia (51.4), Romania (51.3) and Bulgaria, with total growth of 50.5 per cent.
In addition, Turkey’s real GDP per capita increased from 5,950 to 9,270 euros between 2012 and 2023, or by 55 per cent, which means that this country also grew faster than Serbia, and over a period one year shorter, since data for 2024 have not yet been published. Finally, GDP per capita in Hungary (44.3), Montenegro (43.6) and North Macedonia also grew at a similar pace to Serbia, cumulatively by 40.9 per cent.
What officials boast about, and what they keep quiet
Of course, what is kept quiet is the devastating fact that last year Serbia’s GDP per capita amounted to 8,900 euros, only a quarter of the European Union average of 33,650 euros.
Moreover, if we assume that Serbia’s real GDP per capita will continue to grow in the coming period at the same modest average annual rate of 3.3 per cent (which corresponds to cumulative growth of 49.6 per cent over 12 years), and that in the European Union it will grow at a rate of 1.3 per cent (corresponding to total growth of 17 per cent over 12 years), Serbia will reach the EU average only in 2092, that is, in 67 years, and at a level of 81,000 euros. So much for the Serbian catch-up effect and convergence with the EU average.
Nor should the finance minister’s claim that Serbia is regionally dominant in attracting foreign direct investment (FDI) be left out. “More than 60 per cent of all investment in the region has flowed into Serbia, a record 5.2 billion euros, mostly from the EU into industrial production, which increases both our exports and imports,” Mali said.
At a very superficial glance, this statement is partly correct, although during the period of the current government Serbia has on average attracted not 60 but 53 per cent of FDI in the Western Balkans region, excluding Kosovo, as can be seen in chart number 2. The lowest inflow was recorded in 2012, when FDI amounted to 1.3 billion dollars, or 36 per cent of total FDI inflows into the Western Balkans, while last year was a record year, when 5.6 billion dollars flowed into Serbia, or 55.7 per cent of total FDI inflows into the Western Balkans.
Again, what the finance minister did not mention is that, according to data from the National Bank of Serbia, there has been a drastic drop in FDI inflows this year. In the first nine months of last year, FDI inflows amounted to 3.8 billion euros, while in the same period this year they totalled only 2.5 billion, a significant decline of 34 per cent. The fall is even more dramatic when net FDI inflows are observed, as over the same period they fell from 3.4 billion to just 1.5 billion euros, or as much as 56 per cent.
Relative to GDP, foreigners invest more in Montenegro and Albania than in Serbia
The key to manipulating public opinion, however, lies in the fact that FDI inflows are expressed in absolute numbers. The story of FDI seems very simple at first glance – the more capital enters a country, the better; the larger the figure, the more impressive it sounds, it looks good in pro-government media headlines and is easy to remember.
The problem is that the absolute amount, in itself, says almost nothing about how a country really ranks compared with others. For any comparison between countries to be meaningful at all, this inflow must be related to the size of the economy, that is, attention must be paid to the share of FDI in GDP. One billion euros of investment does not mean the same for Germany and for Serbia. In a large economy, it is a drop in the ocean, barely a noticeable thickening of a statistical line. In a small economy, the same sum can change the structure of exports, the labour market and even the exchange rate.
Therefore, in relative terms, Serbia is not the regional champion in attracting FDI either. In the period from 2012 to 2024, with an average FDI inflow share of 5.9 per cent of GDP, it ranks third, behind Montenegro with a share of 10.6 per cent and Albania, where FDI accounted for 7.8 per cent of GDP, as clearly shown in chart number 3.
In practice, when it is said that a country is highly dependent on FDI, this usually refers to a situation in which such inflows consistently exceed five per cent of GDP per year over a longer period, which has indeed been the case in Serbia since 2014. This means that foreign capital is not merely a welcome addition to domestic investment, but becomes the main pillar of the entire development model, that is, capital without which growth and macroeconomic stability would visibly collapse.
High dependence on FDI is a signal that the economy operates in a regime where the key lever of development lies outside its borders. When this pattern is combined with weak domestic savings, an underdeveloped financial market and uncompetitive exports, the message is clear: without a constant inflow of foreign capital, the system cannot be sustained at its current level, let alone advance. That is precisely why it is important not to view FDI as some spectacular figure, but as an indicator of a deep structural dependence, which automatically raises the question for a society of whether it wants to remain in a virtually colonial position in the long term, or is committed to seeking ways to gradually stabilise and strengthen its own development capacities.
All in all, the Serbian government’s projection that real GDP will grow by three per cent next year has clearly failed to take into account the depth of the problems at NIS, the shutdown of the refinery, potential interruptions in gas supply, the fall in FDI and the fiscal burden arising from all of this. It appears that this forecast, quite unjustifiably, assumes a swift regulation of NIS’s ownership structure, a stable gas contract and the maintenance of FDI inflows close to 2024 levels.
All three assumptions have been severely undermined, which means that growth of three per cent in 2026 is unattainable unless rapid solutions are found, such as alternative oil and gas suppliers, stabilisation of the investment climate and fiscal cushioning of the shocks that lie ahead.
(Radar, 22.12.2025)
https://radar.nova.rs/ekonomija/srpski-bdp-po-stanovniku-sinisa-mali/