Financial institutions are adjusting their growth expectations for Serbia’s GDP this year. The International Monetary Fund (IMF) has indicated that it will likely revise its GDP forecast for Serbia downward in April. Meanwhile, the Vienna Economic Institute anticipates a drop in GDP and expects a potential change of government, citing slower economic activity in the first quarter. Branimir Jovanović, economist at the Institute, suggested that growth could pick up slightly after the expected government change, but global events like trade wars will continue to affect the outlook.
The National Bank of Serbia (NBS) has sold foreign exchange reserves in the first months of 2025, reducing the dinar’s defense against the euro. From January to February, NBS net sold 745 million euros, following a period last year when it bought 2.7 billion euros to support the dinar. Despite the weakening of the dinar, reserves remain at a healthy level, covering about seven months of imports.
Serbia plans to borrow up to two billion euros in Eurobonds, issue up to 2.1 billion euros in domestic securities, and take loans from commercial sources totaling up to 3.1 billion euros. This will put additional pressure on public debt, which is expected to rise slightly but remain below 60% of GDP. The budget deficit is projected to be slightly higher than previously expected but will not exceed 3%. Despite unforeseen costs, including student loans and education-related expenses, the fiscal situation is considered stable.
Serbia’s advisory agreement with the IMF requires public debt to remain below 50% of GDP, making it uncertain whether this threshold will be exceeded.
