“In the previous five years (2014-2019), the total net profit of the economy has increased by more than five times, with changeable annual growth dynamics. The number of employees increased by 200,719, while the number of companies increased by 11,892”, said Milan Lučić, Director of the Serbian Business Registers Agency, on the occasion of the release of the “Annual Report on the Performance of the Economy in 2019”, which has been posted today on the Agency’s website. This year, due to the unstable epidemiological situation, the Report is not going to be presented at a usual press conference.
The year 2014 was the last year in which the domestic economy was still gradually recovering from the previous financial crisis, facing also the consequences of the floods. At that time, the Republic of Serbia's GDP declined by 1.8%, while its industrial production decreased by 6.5%. The number of employees was the lowest (971,171) and the net result was negative, amounting to the sum of RSD 132.6 Billion.
“Starting from 2014 and over the next five years, the Serbian economy was growing gradually, which is shown by a number of indicators: over the last two years, the GDP grew from -1.8% to 4.2%, or by 4.4%, while the total volume of business activities of the economy increased by almost 40%. Operating income and operating expenses grew at almost the same pace. However, greater control of expenses is needed to achieve better efficiency of the domestic economy”, said Ružica Stamenković, Registrar of the Financial Statements Register, reflecting on the business results of the economy based on the data contained in the financial statements for the last five years.
Profitability contributed to an increase in the financial capacity of the economy by over 1/4 (operating assets index was 125.5 and equity index was 128.3), increasing own resources necessary for further development [rate of return on equity: 3.1% (2014), compared to 6.8% (2019)] and the ability of the economy to service debts [interest coverage ratio: 0.43 (2014) compared to 7.37 (2019)]. Accumulated losses have been gradually reduced by 7.2 percentage points cumulatively over the last five years, given that the rate of lost equity has fallen from 43.7% (2014) to 36.5% (2019).
“All these results have contributed to achieving the gradual balance in the financing of the economy and the reduction of illiquidity, which is still not at a satisfactory level. This is demonstrated by several indicators: liquidity ratios are at half of a satisfactory level, while the growth of long-term loans, together with own equity, is still not sufficient to finance permanent assets”, Milan Lučić concluded.
Ružica Stamenković has pointed out that the decrease in short-term loans is due to the increase in operating liabilities, which are used as an addition to short-term financing.
She has also emphasized that the necessary short-term funds are still insufficient to service the current liabilities, but the number of companies that have been illiquid for more than 90 days decreased from more than a fifth (at the end of 2014) to 12% (at the end of 2019).
The “Annual Report on the Performance of the Economy in 2019” contains an analysis of the performance and financial position of 104,487 companies employing 1,171,890 employees. In addition to this, the analysis also observes operations of 1,475 institutions and 108,557 entrepreneurs.
A comparative analysis and basic trends indicated in the Report are made on the basis of aggregately processed data for statistical and other purposes for 2019, as well as on the basis of aggregately processed regular annual financial statements for 2018.
In addition to the analysis of economic trends at the overall level, the Annual Report provides a special review from the aspect of concentration of financial performance by sectors and size of companies. It also provides an analysis of specific segments of companies - public enterprises and companies in bankruptcy and liquidation. The analysis is accompanied by adequate tabular and graphical representations.
The full text, entitled: “Performance of the Economy in the Republic of Serbia in 2019”, the publication: “Annual Report on the Performance of the Economy in 2019” and the presentation: “Performance of the Economy in 2019”, which are available only in the Serbian language, are published in the section Registers - Financial Statements - Publications/Macroeconomic Analysis.