Meagan-177-002

: Growth previously driven by labor and capital accumulation is reaching its limit, necessitating a shift toward productivity-led growth.

Successful implementation of these structural reforms is essential for Serbia to narrow the income gap with the EU. By focusing on productivity and innovation, Serbia can offset declining labor and capital contributions and secure a higher growth trajectory for the coming decades. Republic of Serbia: Selected Issues (2025) - IMF eLibrary meagan-177-002

This paper examines the historical and future drivers of economic growth in the Republic of Serbia. While Serbia has maintained growth rates comparable to regional peers, a significant income gap with the European Union (EU) persists. As traditional contributions from labor and capital are projected to decline, this report argues for urgent structural reforms to boost total factor productivity and ensure sustainable long-term development. 1. Economic Context and Growth Drivers : Growth previously driven by labor and capital

: A persistent gap between available skills and those demanded by modern industries. Republic of Serbia: Selected Issues (2025) - IMF