Corruption, cyber crime and migration crisis affect rating - Risk of doing business in Serbia still high

In its March report, Dun&Bradstreet, the world's largest credit rating company, still classifies Serbia as a high-risk country for doing business. The highest rating in the region is given to Slovenia, Croatia and Romania (DB3), followed by Bulgaria, Hungary, Albania, Macedonia, Serbia and Greece that are deemed high-risk countries (DB5), while the only country with a lower rating in the region is Bosnia-Herzegovina (DB6).
The type of rating given to a country reflects the risk of doing business in that country and provides information on the efficiency of their payments abroad as well as on the possible return on potential investment. This month, the level of risk is increased in Canada and lowered in Iran.

It is assessed that corruption is still present in most of the state apparatus of Serbia, government administration, trade and the police. Foreign investors face problems when bidding for a contract and submitting a request for licenses and permits, and the outcome of court proceedings is also uncertain. The Government has given priority to the fight against corruption by changing the rules for public procurements, introducing a penalty for corrupted behaviour and reforming the internal court procedures to reduce external influence on judges. As Dun&Bradstreet says in its report, this process is slow, but effects are measurable. Serbia ranked 71st in 2015 by the corruption perception index, up from the 78th place the year before.

Data provided by the Serbian police point to a rise of cyber crime by 50% in 2015, which poses a significant risk to companies operating in Serbia. The most serious of all is the risk of fraud in online shopping. Although the Internet growth offers significant business opportunities, Dun&Bradstreet advises companies in Serbia to take protective measures against these illegal activities.
The rating of Serbia is also affected by the increasingly deepening migration crisis, which increases the risk pertaining to the continuity of operations.

Data for the last quarter in 2015 show that GDP in Serbia grew 1.3% year-on-year – which is positive given the substantial reduction of government spending and public sector restructuring. These data support the forecast of Dun & Bradstreet's analysts who said that GDP would go up 1.8% in 2016 and 2.8% in 2018 as well as that foreign direct investments in the production sector in Serbia would help the country achieve its long-term economic potential. Dun & Bradstreet in Serbia and Montenegro is represented by the Belgrade company Rating.

Rating d.o.o. Beograd

Dun&Bradstreet

credit worthiness

credit rating

risk of doing business

efficiency of payments abroad

rating of Serbia

corruption

tenders

public procurements

cyber crime

online shopping

migration crisis

GDP of Serbia