Some big questions needed to be resolved in late 2007 for Serbia’s freight transport industry to be more
confident about its immediate and medium-term future. For a start, despite healthy growth rates, a more
stable macroeconomic framework was required. In July 2007 Serbia's central bank governor said that the
country was currently in no condition to join the European Union (EU), and called on politicians to draw
up a plan quickly to lead it in the direction of membership. ‘Whether we talk about massive and totally
inefficient public spending, a need to restructure public companies, or a need to reform the pension
system, we all know that Serbia can hardly join the European Union’, Radovan Jelasic said, arguing that
it was high time for Serbia to accelerate reforms. In June, Serbia resumed talks with the EU on a
Stabilisation and Association Agreement - the key accord that might ultimately lead the country to EU
membership. The new government in Belgrade hoped that Serbia would become an EU member by 2012.
That would require resolving political issues (such as the future of Kosovo) .The coalition led by Prime
Minister Vojislav Kostunica had yet to agree the pace of sale of inefficient public monopolies, including
NIS (oil), EPS (power) the Telekom Srbija landline monopoly, railways, postal services, and the JAT
airline. Coupled with this, new investment in transport infrastructure was needed urgently. Even though
much can still go wrong, in BMI’s new Serbia Freight Transport Report 2008, we are cautiously
optimistic, forecasting that overall freight measured in million tonnes-km (mntkm) carried will grow by
an average of 4.4% in the 2006-2010 period.
Various factors support this prediction. Although the risks to growth remain high, BMI is forecasting that
the Serbian economy will grow at an annual average rate of 4.9% over the 2006-2010 forecast period. The
driver for freight carried growth, apart from the broadly healthy economy, will be continued recovery
from the disruption caused by the wars of the 1990s and at least the potential of closer integration with the
EU and in particular with neighbouring new EU members, which will be enjoying rapid economic and
trade growth. This, together with Serbia’s role as an East-West transit corridor, should lead to greater
demand for freight across road haulage, rail, pipeline and river transport modes.
By transport modes, we see greatest growth in road haulage, which will expand by an average of 6.0% per
annum, lifted by expansion investment in new highways and growing trade. It will be followed by
pipeline throughput, up by an annual average of 4.9%, mainly as a result of the new pipeline agreement
with Russia’s Gazprom. We expect rail freight to grow by 4.1% per annum on average, as questions over
privatisation have yet to be clarified. Serbia scores 37 in our freight business environment ranking, out of
a theoretical potential maximum of 70. This places it below the average for its European peers, which
stands at just under 41. The country scores best in transport intensity - a measure of the dynamism of
foreign trade - and reasonably well in freight and infrastructure growth. Areas for improvement include
overall economic and political risk as well as the regulatory environment.
For the 2006-2010 forecast period, we expect the transport and communications sector to continue
outpacing the economy as a whole. It will achieve average annual growth of 6.1%, versus 4.9% for
overall GDP. The total value of transport and communications GDP will rise to US$6.08bn in nominal
terms by 2010, representing 9.1% of Serbia’s GDP.
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