The impact of the global economic crisis on the economy of the Republic of Serbia

Abstract

The global economic crisis has certainly had a significant negative impact on the economic situation in Serbia. However, it is wrong to relate all the financial difficulties of the Serbian economy to the global crisis, and an even greater mistake would be to hope that all its problems will be solved by the termination of the global economic crisis. Our economy is, we can say, in the decades-long decline. Its losses accumulated over the past seventeen years increased from 3.8 billion to 2,462 billion dinars, or 648 times. This paper aims to point out the bad financial and structural position of Serbian economy that constantly hampers the economic activity and causes the distortion of the companies' worth. Keeping this in mind, after the introductory discussion in the first section of this paper, we provide some elaboration on the interdependence of macroeconomic indicators and the performance of the economy. The second section presents macroeconomic environment in Serbia in the period of the analysis of the Serbian economy financial position. The third section highlights the fact that business losses and their accumulation affect the financial structure of the economy. The fourth and the fifth sections deal with the analysis of net working capital, which is an important tool for assessing the financial structure.

Keywords

• economic crisis
• macroeconomic stability
• macroeconomic indicators
• losses
• capital structure
• debt
• net working capital