BMI View: Real GDP growth will slow in Serbia as the new government resumes an ambitious austerity agenda, which will act as a constraint on domestic demand growth in terms of private consumption and retail sales . Although modest, Serbia's recovery will remain on track, driven mainly by the export sector, underpinning our forecast for GDP growth of 1.7% in 2016 and 2.5% in 2017.
|Headline Household Spending|
|e/f = BMI estimate/forecast. Source: BMI, Eurostat|
Key Views And Developments
Unemployment, which was already elevated at 19% as of Q116, will continue rising, which will weigh on the recovery in private consumption in Serbia.
We see few drivers of private consumption growth in Serbia against the backdrop of renewed reduction in public sector wages and pensions, and rising inflation, which will erode consumer purchasing power. As such, while private consumption expanded by 0.7% year-on-year (y-o-y) in Q116, this pace is unsustainable, and we forecast a full-year expansion of just 0.2% for the full year, before expanding further by 1.0% in 2017.
The total population will decrease by an average of 0.4% annually over the forecast period - one of the fastest rates in the region.
By 2017, Belgrade should feature two new shopping malls, Rajiceva Shopping Center and Belgrade Plaza. Being developed along the main pedestrian zone Knez Mihajlova Street, Rajiceva Shopping Center will comprise roughly 15,300 square metres and more than 80 stores. Israeli company Plaza Centers is working on the Belgrade Plaza shopping centre, running to 32,500 square metres.
In summer 2016 the European sportswear brand 4F officially arrived in Serbia due to an agreement with Djak sports stores across the country to stock the brand. At the same time CCC established a subsidiary on the Serbian market under the name CCC Shoes and Bags Beograd, with plans to open its first stores in the country towards the end of the year.
The Serbia Retail Report has been researched at source and features BMI Research's independent assessment and forecasts for the retail sector. The report examines key drivers of retail sales growth and future prospects, including consumer spending and private sector investment.
BMI's Serbia Retail Report also examines the level of development and potential for growth of the retail sector, the commercial initiatives of major players, changing consumer demographics that influence demand and the regulatory environment. Key sub-sectors include mass grocery retail, autos, over-the-counter pharmaceuticals, computers and consumer electronics.
- Benchmark BMI's independent retail industry forecasts for Serbia to test other views - a key input for successful budgeting and strategic business planning in the Serbian retail market.
- Target business opportunities and risks in Serbia through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
BMI Industry View
Summary of BMI’s key forecasts and industry analysis, plus a discussion of major industry developments and a snapshot of key short-term demand-driving macroeconomic movements.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the retail sector and within the broader political, economic and business environment.
BMI Industry Forecasts
There are four separate 5-year forecast modules in the retail reports. These are:
- Headline Retail Forecast: Total household spending (local currency and USDbn, % growth, % GDP, per capita, per household), spending by retail sector (food & non-alcoholic drink, alcoholic drink, clothing & footwear, housing & utilities, furnishings & home, health, transport, recreation, education, restaurants & hotels, personal care & insurance (local currency and USDbn, % growth, % GDP, % of total spending)
- Retail Sector Forecast: Breakdown of Food, Non Alcoholic Drink, Alcohol, Tobacco, Clothing, Footwear, Household Goods, Furnishings, Appliances, Glass and Tablewear, Household Textiles, Consumer Electronics, Garden Toys and Pets, Home and Garden tools, Personal Care, Personal Effects Spending (USDbn, % Growth)
- Household Income and Numbers Forecast: Number of Households (‘000, % growth); gross income per household and per capita; net income per household and per capita; tax and social contributions per capita; breakdown of household incomes – USD5000+, USD10,000+ USD50000+ (‘000, % of total); labour force, employment and unemployment (‘000, % change)
- Demographic Forecast: Total population; Babies 0-12 months; Young Children 0-4yrs; Children 5-9yrs; Young Teens and Older Children 10-14yrs; Older Teens 15-19yrs; Adults 21yrs +; Young Adults 21-29yrs; Middle Aged 40-64yrs (‘000, % growth, male, female); Urban Population (‘000, % population); Rural Population (‘000, % population).
BMI’s Retail Risk Reward Index
BMI’s Risk Reward Indices provide investors looking for opportunities in the region with a clear country comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
Provides a detailed country-specific analysis of the key trends and developments in the retail sector as a whole, as well as an assessment of the main drivers affecting the major retail segments including mass grocery retail, fashion, pharmacies, consumer electronics, home improvement and personal care. The market overview also considers the most effective store formats in a given country and the impact of these factors on the main international and domestic players’ development strategies.
This provides a brief overview of the key players in each subsection of the retail sector including MGR, Fashion, Home Improvement, Consumer Electronics, Pharmacies, and Department Store chains.
The Retail Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.