Besides taking people off of the streets and out of the office, COVID-19 has had various affects on Serbian businesses and its population. On March 17, 2020, the Government of Serbia declared a state of emergency, which lasted until May 7, 2020. For this nearly 2-month period, the country was under stay-at-home orders, all non-essential businesses were closed and a 5pm daily curfew was implemented, among other measures. The effect that this will have on the economy in general is yet to be determined and the effect that this will have on the Serbian NPL Market will become more evident as the 90-day moratorium implemented by the National Bank of Serbia, for the repayment of loans wraps up at the end of June. Moratorium was introduced on all types of loans in order to help mitigate potential defaults due to the Coronavirus health crisis, but the question remains how this situation will continue to develop once lenders begin enforcing payment procedures.
The National Bank of Serbia has reported a sustained and stable macroeconomic picture with a Q1 2020 GDP growth rate of approximately 5%, despite the COVID-19 pandemic. Pre-pandemic trends in the NPL sector were quite good in Serbia, which sat among the top 17 countries in the region in terms of nominal and share placements. This combined with the stable macroeconomic picture is a positive indicator for the development of the industry in the post-pandemic world.