Fiat deal Serbia’s great export opportunity

Belgrade, Dec 17, 2008 – Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic today said that Zastava’s deal with Fiat is a great export opportunity for Serbia, especially in the context of the global economic crisis.

At the summit of Serbia’s largest exporters Dinkic said that a lot of public attention is being paid to the enforced holiday leave of Fiat employees in Italy, whereas its increased production in Poland is being overlooked. Fiat produces small cars in Poland, the kind of which it should start producing in Kragujevac as well, recalled the Minister.

He said that Serbia’s key export markets will still be those of the EU and regional countries, adding that export will be stimulated thanks to the free trade agreements.

The Minister recalled that Serbia has signed such an agreement with Russia, noting that its full potential has not yet been exploited. He also repeated that talks on free trade agreements with Belarus and Turkey are underway and the plan is to sign them with Ukraine and Iran as well.

According to him, if Serbia wants to attract foreign investments and increase export, customs procedures must be speedier. Serbia must also enable railway transport of goods from Turkey to the EU via Serbia, because the goods are now transported by trucks, which takes 130 hours, whilst by railway it could be cut down to 35 hours, explained Dinkic.

He announced that the government and the National Bank of Serbia are preparing measures to ensure the stability of the dinar and prices, noting that Serbia can respond to the crisis properly only if it is aware of its cause.

He explained that the crisis was caused by poor decisions made by a portion of the banking sector.

This crisis will cause problems for Serbian exporters as well, he said, adding that Serbia should seek to increase exports to countries in the region.

Speaking about basic macroeconomic indicators, Dinkic stressed that inflation should be around 8% by the year’s end, which is also the government’s projection for the next year.

Foreign direct investments in Serbia this year will amount to $3 billion, just as in 2007, which is quite satisfactory, he said.

Dinkic specified that Serbia’s public debt is pretty low and will this year stand at around 25% of GDP, which will enable the government to receive favourable loans for infrastructure investments.

Serbia’s largest problem is the deficit in the balance of payments, which this year stands at 17% of GDP but its growth is expected to slow down next year.