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Serbia is a market economy but the public sector remains significant in certain areas and a number of institutional reforms are required. The economy relies on manufacturing and exports, driven largely by foreign investment. Despite some progress towards EU membership, it remains a distant objective. Public debt remains at a fairly high level. A large part of the economy is euro-based (67% of total loans). The SRD is likely to remain broadly stable in the short term given central bank interventions to prevent harmful depreciation.

In the medium term, socio-political constraints will continue to put a limit on the pace of reform. Unfavourable demographic trends (as in the other Western Balkan countries) is a constraint on potential growth. The country entered the pandemic in a relatively favourable economic situation. Economic activity was resilient to the consequences of the pandemic (-0.9% in 2020), but the fiscal deficit rose to a high level.