If a change of government takes place on 25 October, the question of what should be done first on the economic front would automatically arise.

As some of the key moves, economists consulted by Danas about what the first steps should be in the event of a change of government highlight a decisive fight against corruption, establishing the actual state of public finances, a detailed “combing through” of public project contracts, the reorganisation of the entire public sector, and a shift in the economic growth model.

For instance, Dragovan Milićević, a doctor of economic sciences and former state secretary at the Ministry of Trade, believes that the Serbian economy is currently facing several key challenges. According to him, one of these is a limited and slowed-down inflow of foreign direct investment because, as he says, the existing model based on generous subsidies and “assembly-line” cable-manufacturing activities has “run its course.”

“Now a reverse process of withdrawal and the transfer of dividends and reinvested profits across the border is starting. This is already pronounced. In a situation of chronic trade deficit, or current account deficit, there are two sources to cover it: either eating into foreign exchange reserves or borrowing,” Milićević states. He points out that, unfortunately, Serbia has been trapped in a “twin deficit” for decades (denoting the simultaneous existence of a budget deficit and a current account deficit), and this situation is generally bearable only as long as it is possible to borrow and cover both.

“The next trap is remittances as a traditional source of deficit coverage. In the current situation of the European economy and the position of our workers within it, that is hardly going to be an abundant source,” Milićević points out. What the state must do, and should have done long ago, he adds, is to push for domestic investors because, as he emphasises, “the money stays in the country.”

He also points out that we “boast about GDP growth,” which he says is de facto now an outdated category for assessing the success of an economy, because it only looks at invoiced realisation and does not say enough about the quality of that growth and its impact on the standard of living.

“The main story is looking at strategic sectors that produce tradable goods as generators of value creation. GDP calculation includes gambling, betting, drugs, and prostitution, so I don’t quite believe the public benefits much from that,” Milićević states.

He believes that state-owned enterprises are also a challenge. He points out that EPS is a special case, as are other large public enterprises where there has been a major devastation of business quality and a drop in profitability and financial potential.

“The epilogue is that these enterprises now, when looking at business potential and the generation of new value, are worth far less than 10 years ago,” Milićević points out.

Branimir Jovanović, a Western Balkans expert at the Vienna Institute for International Economic Studies, says that the new government will have its hands full in the area of the economy after the elections, because, as he points out, the current administration has undertaken numerous populist measures to boost its popularity ahead of the polls, which are difficult to sustain in the long run.

“I would single out two challenges. The first and most urgent will be tidying up public finances. Lowering medicine prices, reducing fuel duties, increasing wages and pensions, numerous one-off payments – these are all measures that are difficult to sustain in the long run without tax increases. Therefore, the new government will either have to cut certain expenditures or increase taxes, which is not popular. The situation is not that serious, the state is not on the verge of bankruptcy, but something will have to be done, and that will certainly occupy the attention of the new government during the first few months,” Jovanović believes.

The second challenge, in his opinion even more important especially in the long run, is changing the economic model. Our interlocutor points out that the model from the last decade or so, based on attracting foreign investment through low wages, low taxes, and numerous privileges, combined with large state investments primarily in motorways, “has run out of steam.”

“Public investments should be continued, but directed more towards railways, public transport, and renewable energy sources, rather than just motorways. There will no longer be as much foreign investment as before, nor will it be possible to attract it in the same way, so the focus will have to shift towards higher-quality and high-tech investments,” Jovanović points out.

And most importantly, he adds, the state will have to support domestic enterprises much more, especially those that are export-oriented and have growth potential, through active industrial and innovation policies, so that they become the new engine of economic growth.

Boban Stojanović, a professor at the Faculty of Economics in Niš, believes that the first step should be to establish the real state of public finances, investments, and total state expenditure.

“The second step should be the reorganisation of the public sector, including local self-governments,” Stojanović states.

As a third step, he highlights changing the economic structure and a new industrial policy, including a regional development policy that would influence the distribution of industrial and economic entities.

“A well-thought-out regional development policy is lacking,” he says.

When it comes to what could lower the cost of living in the long term, instead of temporary price controls, Stojanović sees strengthening competition through the introduction of new players into the market as one of the key solutions.

He also believes that other problems in trade should be resolved, including high concentration in certain markets. As an example, he cites the coffee market, which he says is “70 percent in the hands of a single economic entity.”

Stojanović points out that it is therefore important to work on more efficient agriculture, as greater supply could help lower prices, as well as boost the competitiveness of the domestic economy compared to imported products.

Economist Ljubomir Madžar believes that among the first moves of economic policy should be a decisive fight against corruption, namely the creation of mechanisms that would reduce it to the absolute minimum.

As a second important step, he cites a thorough audit of public projects currently under construction. In his opinion, it is necessary to re-examine their justification and determine which projects should be continued and which should be suspended. Madžar also advocates changing the state’s attitude towards agriculture, assessing that the previous policy towards that sector has led to its serious collapse and that it should be brought to an end.

(Danas, 24.09.2026)

https://www.danas.rs/vesti/ekonomija/sta-bi-nova-vlast-prvo-morala-da-promeni-u-srpskoj-ekonomiji/