To fully understand the policy context in Serbia it is necessary to examine the economic development following the breakup of Yugoslavia. After 2000, the country entered a transition period characterized by high growth rates, but also by the weakening of social rights and the labor market, within a neoliberal reform model promoted by international institutions.
The global financial crisis of 2008–2009 interrupted this trend and led to prolonged stagnation, so the period up to 2015 is often referred to as the “lost decade.” Recovery followed after 2015, primarily through a growth model based on foreign direct investment and, from 2017, with increased public infrastructure investments.
Although this model stimulated economic growth, it simultaneously increased the economy’s dependence on external capital and on activities with relatively low productivity. A key structural weakness of Serbia’s development path has been the limited advancement of small and medium-sized enterprises (SMEs), particularly in the areas of digitalisation, technology adoption and integration into the supply chains of larger systems.
Analysis of convergence towards the EU average standard of living
When it comes to Serbia’s convergence trajectory, it is characterized by progress in the economy, the labor market, and digitalization, alongside persistent challenges in governance and the rule of law, the environment, healthcare, education, and broader infrastructure. The result is a development path based on certain advantages, but also significant structural limitations that continue to constrain the speed and depth of convergence towards the EU. The weaknesses and strengths of Serbia’s development model become even more pronounced when viewed through the lens of the five scenarios analyzed in this study. These scenarios show that, regardless of the path Serbia takes, certain areas consistently fail to converge with EU standards, highlighting deep structural limitations.
Across the five analyzed scenarios, Serbia’s convergence trajectory varies significantly, with only a limited number of indicators changing depending on the direction of public policies. Under the status quo scenario, progress remains slow and uneven, whereas the full EU accession scenario brings the broadest and fastest improvements, particularly in GDP per capita, poverty reduction, energy intensity, and ICT service exports.
Structurally, the analysis is organized so that the first chapter provides an overview of convergence across the observed areas, followed by an explanation of convergence trends. A particularly significant part of the analysis relates to scenarios predicting the course of convergence towards the European Union. The analysis also includes conclusions and recommendations, as well as a description of the methodological framework, levels of observation, and the structure of the work.
Conclusions and Recommendations
The analysis of the eight observed areas clearly shows that Serbia’s development path is moving towards the EU average, but unevenly, even in scenarios involving closer integration with the EU. Persistent gaps remain in several areas, indicating the limitations of partial progress and reforms.
These findings serve as a call for the Government of Serbia to intensify and deepen the reform agenda, particularly in areas that constrain long-term convergence.
At the same time, they emphasize the importance of continuous support from the EU, regional and international organizations, and civil society to help Serbia implement the complex and long-term reforms necessary for sustainable economic and social convergence.
The Institute’s goal, through the implementation of the “converge2eu” project, is to establish a comprehensive research and advocacy framework for monitoring socio-economic development indicators in Serbia in comparison with those in the EU.
