Serbia’s economic outlook is facing renewed pressure from energy market developments as the government seeks to maintain fiscal targets while supporting growth through investment and infrastructure programmes. The International Monetary Fund (IMF) expects Serbia’s economy to expand by 2.75% in 2026, with growth projected to accelerate to 4% in 2027 as Expo-related construction, manufacturing exports, agriculture and energy investment contribute to economic activity.
Inflation is forecast at 3.5% in 2026 and 4.5% in 2027.
Fuel Excise Policy and Energy Cost Pressures
Higher international oil and gas prices could create additional challenges for Serbia’s inflation outlook and public finances. Earlier in 2026, Serbia temporarily reduced fuel excise duties in response to energy price pressures. The IMF has recommended reversing those reductions to avoid creating a long-term subsidy obligation for the state budget. Restoring excise duties would increase government revenues but would also transfer a larger share of external energy cost pressures to households, transport companies and industrial producers.
Budget Rules Limit Long-Term Support Measures
The government has maintained its commitment to keeping the fiscal deficit below 3% of GDP in both 2026 and 2027. Fiscal policy is also constrained by rules limiting increases in public-sector wages and pensions, reducing the room for extended fuel support measures.
Additional budget pressure could emerge if Expo construction projects, energy infrastructure investments and other capital programmes require spending above planned levels while energy-related support measures remain in place.
