In Q1 2026, Serbia recorded a 4.9% year-on-year increase in private consumption, which contributed 2.9 percentage points to overall GDP growth. During the same period, retail turnover rose 9.3% in current prices and 8.6% in constant prices, exceeding growth rates in industrial production and construction and aligning with the acceleration in quarterly GDP performance.
Wage growth supports purchasing power
The average net wage in Q1 2026 reached RSD 118,736, reflecting an 11.7% nominal increase and an 8.8% real increase compared with Q1 2025. In March 2026, the average net wage stood at approximately €1,036, up 12.4% year-on-year.
These income developments translated into higher purchasing power across retail food markets, household goods, hospitality services, domestic travel, consumer services, and imported durable goods.
Inflation trends and price dynamics
Average annual consumer price inflation in Q1 2026 stood at 2.6%, down from 4.5% in Q1 2025. Price increases during the quarter were concentrated in electricity, healthcare, utilities, tobacco, and fruit, which together accounted for more than half of the quarterly inflation movement.
The moderation in inflation allowed nominal wage growth to translate more directly into real consumption activity.
Retail performance into Q2 2026
Retail turnover in April 2026 increased by 8.3% in current prices and 5.6% in constant prices compared with April 2025. This indicates continued expansion of retail activity into the second quarter, following the Q1 performance.
Consumption outlook and sectoral transmission
For 2026, real household consumption is projected in a range of 3.5% to 4.5% growth, with consumption identified as the strongest domestic-demand component.
Retail and service sectors are positioned to benefit from higher turnover, while input costs including labour, rent, logistics, and regulated utilities remain relevant for cost structures. The banking sector is linked to stronger card payments and consumer-credit demand, while wage growth is expected to influence cost levels for exporters. Private consumption remains a primary component of Serbia’s current growth structure, alongside evolving sectoral effects across retail, banking, services, and export-oriented industries.
