Serbia’s export sector demonstrated resilience in 2025 but experienced a slowdown as external factors became less favorable. A decline in industrial activity within the European Union, coupled with rising input costs and logistical challenges, hindered the growth of export volumes and diminished the sector’s capacity to counterbalance increasing imports.
Manufacturing exports remained a significant contributor to Serbia’s foreign earnings, particularly in automotive components, machinery, rubber products, and processed metals. However, the growth rates have slowed compared to the robust recovery seen post-pandemic. The demand from key EU markets weakened as manufacturers adjusted their inventories and delayed investments, directly impacting Serbian suppliers that are integrated into these supply chains.
Cost pressures have also remained high. Although energy prices have decreased from the peaks experienced during the 2022 crisis, they continue to be volatile and influenced by geopolitical events. The prices of imported intermediate goods have shown variability, which has squeezed profit margins for exporters working under fixed contracts. This situation has constrained firms’ abilities to compete effectively on price, especially in lower-value markets.
Additionally, export performance faced challenges from regulatory and trade restrictions impacting certain sectors like steel. While these measures did not lead to a collapse in exports, they limited potential growth at a time when Serbia required stronger external demand to improve its trade balance.
Consequently, there has been a contraction in Serbia’s economic growth drivers. With exports no longer on an upward trajectory and investment levels remaining low, the economy has become increasingly reliant on services and consumer spending. This shift has maintained positive GDP growth but has also made the economy more vulnerable to external shocks, given that consumption-driven growth tends to be more reliant on imports.
Looking forward, the recovery of exports will hinge less on Serbia’s internal competitiveness— which remains robust—and more on the future trends of industrial demand in the EU. Should European manufacturing stabilize by 2026, Serbian exporters may be positioned to respond effectively. Conversely, if conditions do not improve, the export sector may continue to function below its potential, thereby reinforcing the economy’s moderate growth limits.
