Germany is Serbia’s most important trading partner. In 2024, Serbia exported goods worth €4.27 billion to Germany, while imports from Germany totalled €5.14 billion. This amounted to a total trade exchange of €9.41 billion last year.
At the same time, total trade with Italy, for example, reached €4.49 billion, while imports from China into Serbia in 2024 amounted to €5.11 billion, according to data presented in early April to a group of Serbian journalists visiting Frankfurt and Berlin as part of the Pulse of Europe project.
Trade between Serbia and Germany has doubled from 2018 to 2024. While in 2018 the total stood at €4.67 billion, it surpassed €5 billion in 2020, was close to €8 billion in 2022, and exceeded €9 billion in the past two years – specifically €9.023 billion in 2023 and €9.411 billion in 2024, highlighted Alexander Markus, Executive Board Member of the German-Serbian Chamber of Commerce.
Serbia mainly imports from Germany finished or semi-finished components for further processing in the mobility sector (25%), machines and equipment, mechanical tools, electronic devices (25%), and chemical products (11%).
Exports from Serbia to Germany are primarily made up of goods from the mobility sector (51%), followed by iron ore and wood products, as well as food (each 11%) and chemical products (7%). More than €2 billion of these exports come from German investors – including wire harnesses, electronics, cars, and trams.
The largest German investors in Serbia are Stada-Hemofarm with €900 million, ZF Serbia with €580 million, and Lidl with €460 million. Notable mentions also include Continental (€183 million), Brose (€180 million), Metro Cash & Carry (€142 million), and Messer Tehnogas AD (€119 million).
“Total foreign direct investments from Germany in Serbia have reached around €6 billion since the year 2000. Some 80,000 jobs have been created by 900 companies with German capital, with the largest investments being in the pharmaceutical industry, automotive suppliers, retail and wholesale, and construction materials,” said Alexander Markus.
He also noted that German companies in Serbia pay, on average, 31% higher wages than the overall business sector average, account for 16% of Serbian exports, and generate 7% higher gross added value than the national average.
“In certain sectors, German investors are three times more efficient than their competitors,” he emphasised.
German businesses pessimistic
The business climate in Germany improved at the end of January, according to a survey by the ifo Institute involving 9,000 companies. However, expectations then declined again, and companies remain pessimistic.
Regarding the experiences and expectations of German businesses in foreign markets, a survey conducted by the German Chamber of Commerce between 24 February and 7 March, which gathered 2,600 responses from companies, showed that only 15% of respondents expect better business prospects in 2025. Meanwhile, 62% believe the situation will remain the same, and 23% fear worsening conditions.
“For the region of Eastern and Southeastern Europe (excluding EU countries), expectations are even gloomier – only 10% of respondents expect an improved business climate, 65% see no change, and 25% fear a deterioration,” said Stefan Kägebein, Director of the German Chamber of Commerce for Eastern, Southeastern Europe, and the South Caucasus, in a meeting with Serbian journalists.
He also emphasised that migration currently has a significant impact on the German labour market. For instance, about 27% of the workforce in Germany consists of immigrants – people without German origin. Projections show that by 2029, some 300,000 working-age people will leave the country each year, meaning that employment growth will rely heavily on the influx of foreign nationals (non-Germans).
Western Balkans work regulation simplified
Access to the German labour market has been simplified for workers from the six countries of Southeastern Europe. A prior approval from the Federal Employment Agency is required under the Western Balkans regulation, significantly speeding up the visa application process. A fixed quota – set before negotiations on the new coalition government – allows for up to 50,000 residence permits annually (for all six countries). The permits are allocated by month and nationality, and applications can only be processed until the monthly quota for a specific nationality is exhausted.
Easier employment in Germany is likely to further contribute to the “brain drain” from Serbia, which naturally slows down the country’s growth and accelerates the decline of rural areas. On the other hand, German companies have invested in Serbia so far precisely because of its skilled and reliable workforce.
New German government reduces quota for Western Balkans
Parties forming the new government in Berlin plan to further reduce the number of workers coming to Germany through the special rule for the Western Balkans. The Christian Democrats (CDU/CSU) and the Social Democrats (SPD) agreed last week to cut the maximum number of permits granted under this programme to 25,000 per year. The outgoing government had previously doubled the quota to 50,000 per year, and this change came into effect on 1 June 2024.
Anyone coming from Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, or Serbia who wishes to move to Germany under the Western Balkans rule must already have a signed employment contract. The rule applies even to unskilled workers. It was introduced to prevent people from seeking asylum in Germany without grounds. Employment permits must be applied for in the country of origin.
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