Serbia’s incoming government faces a major sovereign credit assessment as Fitch Ratings reviews the country’s BB+ rating with a positive outlook, one notch below investment grade. The assessment will focus on whether the political transition can preserve fiscal discipline, macroeconomic stability and investor confidence while advancing institutional reforms.
The Student List, which secured approximately 53% of the vote and 141 of 250 parliamentary seats, is preparing to take power after a change in political leadership. Fitch has maintained Serbia’s rating but said the incoming administration’s economic programme remains insufficiently defined.
Investment-grade prospects depend on fiscal discipline
Fitch reaffirmed Serbia’s BB+ rating and positive outlook, citing macroeconomic stability, prudent public finances and stronger international reserves.
The agency projected economic growth of 2.8% in 2026, rising to 4.0% in 2027, partly supported by investment and activity related to Expo 2027. Government debt was expected to stabilise at around 44% of GDP during 2026–2028, while the fiscal deficit was projected to remain below 3% of GDP in 2026.
Serbia also holds an investment-grade BBB- rating from S&P Global Ratings, while Moody’s assigns Ba2 with a stable outlook. An upgrade by Fitch would bring another major rating agency’s assessment into investment-grade territory, potentially expanding institutional investor demand for Serbian government securities. Higher public debt, weaker fiscal balances or declining external reserves could complicate that progress.
Infrastructure reviews and public finances
The incoming government’s plans to examine major public investments and contracts will be important for Serbia’s fiscal outlook.
The infrastructure programme covers roads, railways, energy facilities, public buildings and Expo 2027 projects. These investments support construction, employment and financing activity, but their economic returns depend on transparent procurement, cost control and operational performance. Stronger oversight could reduce exposure to cost overruns and contingent liabilities. However, prolonged contract reviews or uncertainty over existing agreements could affect contractors, lenders and investors.
International financial institutions and commercial banks will be monitoring contractual continuity, procurement procedures, payment arrangements and the reliability of public-sector counterparties.
Energy policy and foreign investment
Serbia’s economic ties with the European Union, China and Russia cover trade, industrial production, infrastructure financing and energy supply. Maintaining a pragmatic balance among these relationships will remain important for the incoming administration.
The financial position of state-owned energy companies, fuel supply arrangements and investment in electricity infrastructure could affect public finances and industrial competitiveness. Additional government support or delayed projects could increase fiscal pressure.
Stronger corporate governance, transparent investment programmes and clearer regulation could improve financing conditions for electricity generation, transmission, renewable energy and industrial decarbonisation. Foreign investors will also assess taxation, permitting, contractual security and the treatment of existing investments when considering projects in manufacturing, technology and infrastructure.
Institutional reform remains central to investor confidence
The Student List has identified the rule of law, accountability, stronger institutions and oversight of state contracts as priorities.
Effective implementation could improve legal certainty, public procurement and regulatory predictability. The movement’s limited government experience, decentralised organisation and broad political composition could complicate economic decision-making.
Investors will be looking for a coherent economic team, measurable fiscal priorities and constructive engagement with international creditors and financial institutions. The parliamentary majority creates an opportunity for reform but does not automatically guarantee administrative capacity or consistent economic policy.
Fitch’s assessment will indicate whether Serbia’s political transition is viewed as compatible with its existing credit fundamentals. An affirmation of BB+ with a positive outlook would preserve the possibility of an upgrade, while a shift to a stable outlook would signal weaker upgrade prospects without constituting a downgrade.
