Serbia’s first-half budget execution for 2026 shows a strong concentration of public spending on defence procurement, EXPO 2027-related construction, and major Belgrade transport investments, while several environmental, healthcare, flood-protection and energy-efficiency programmes recorded limited implementation.
- Defence procurement drives largest first-half capital outflow
- EXPO 2027 becomes major public investment category
- Surčin transport links receive accelerated funding
- Belgrade transport projects receive significant allocations
- Rail and road investment execution remains uneven
- Several large infrastructure projects remain inactive
- Environmental and water projects lag behind transport spending
- Healthcare construction programmes show low execution
- Energy transition programmes record limited spending
Budget data covering the period from 1 January to 30 June 2026 show that the state budget was planned with revenues of approximately RSD 2.415 trillion, expenditure of RSD 2.752 trillion, and a deficit target of RSD 337 billion, equivalent to around 3% of GDP. Total capital expenditure was planned at approximately RSD 602 billion.
Defence procurement drives largest first-half capital outflow
The largest individual first-half payment was related to the acquisition of Dassault Aviation Rafale combat aircraft for the Serbian Armed Forces. The government allocated RSD 90 billion for the programme in 2026, of which RSD 58.7 billion, or 65.2%, had been spent by the end of June. The payment, worth approximately €500 million, exceeded the combined first-half execution of several major civilian infrastructure programmes.
Additional defence spending included RSD 4.4 billion for weapons and military equipment under a tripartite agreement. This represented 63.3% of the annual allocation of RSD 6.96 billion. Domestic military infrastructure projects moved at a slower pace. Construction of the new Ministry of Defence and General Staff buildings received RSD 746.8 million, representing only 9.8% of the annual allocation of RSD 7.65 billion. No expenditure was recorded for planned infrastructure related to the land forces, air force and air defence, or military facilities in Priboj, Niš and Pančevo. The programme connected with the planned return of compulsory military service also recorded partial implementation. The initial allocation of RSD 6.36 billion was reduced to RSD 4 billion, of which RSD 1.64 billion, or 41%, had been spent by June.
EXPO 2027 becomes major public investment category
A significant share of capital spending was directed towards EXPO 2027 preparations in Surčin, which include exhibition facilities, transport infrastructure, utilities, accommodation capacity and the National Stadium. The fastest implementation was recorded for the design and construction of buildings in zones B and E. By the end of June, spending had reached RSD 12.84 billion, almost matching the annual allocation of RSD 12.9 billion.
The main EXPO Belgrade 2027 construction programme within the Surčin complex recorded first-half spending of RSD 10.17 billion from an annual allocation of RSD 42.57 billion, representing an execution rate of 23.9%. Funding for EXPO-related linear infrastructure was increased during the year from RSD 18.6 billion to RSD 28.7 billion. The category includes roads, stormwater drainage, gas and electricity systems and heat-supply infrastructure. First-half spending reached RSD 8.37 billion, or 29.1% of the revised amount.
An additional RSD 805 million was spent on EXPO implementation support, including approximately RSD 503 million in subsidies for public non-financial enterprises and organisations and RSD 302 million for domestic non-financial assets and additional investments.
Surčin transport links receive accelerated funding
Transport infrastructure connecting the EXPO complex represented another major spending category. The railway connection between Zemun Polje and the National Stadium received RSD 10.14 billion during the first half, equal to 59.6% of its annual allocation of RSD 17 billion. EXPO road infrastructure received RSD 2.9 billion from a planned RSD 7 billion, while the National Football Stadium recorded spending of RSD 5.28 billion, or 24.9%, from its annual allocation of RSD 21.2 billion.
Combined spending on EXPO facilities, the stadium and associated infrastructure exceeded RSD 50 billion in the first six months of the year. The programme includes not only construction costs but also future operational obligations related to exhibition buildings, transport facilities, utilities and other public assets after completion.
Belgrade transport projects receive significant allocations
The Belgrade metro programme recorded rapid budget execution. From the RSD 26 billion allocated for 2026, spending reached RSD 13.9 billion, or 53.6%, by the end of June. The expenditure included around RSD 11.9 billion for machinery and equipment, RSD 1.23 billion in transfers to the City of Belgrade, and RSD 826.5 million for buildings and structures. The new bridge over the Sava received RSD 1.54 billion, representing 31.9% of its annual allocation of RSD 4.8 billion.
By contrast, the central Belgrade wastewater collection and treatment system recorded no expenditure despite an initial RSD 2 billion allocation.
Rail and road investment execution remains uneven
Several transport projects recorded slower implementation. No first-half spending was reported for the planned acquisition of five electric trains capable of 200 kilometres per hour, despite an annual allocation of RSD 4.35 billion. The Hungarian-Serbian railway project recorded spending of only RSD 497.7 million, or 4.2%, from the annual allocation of RSD 11.76 billion.
The Novi Sad–Ruma expressway received RSD 7.3 billion, close to half of its annual allocation. The Ruma–Šabac–Loznica corridor recorded expenditure of RSD 1 billion, representing 19.2% of the planned RSD 5.25 billion. Serbia also allocated RSD 315 million for removal of the sunken German Second World War fleet from the Danube, compared with an annual budget of RSD 699 million. The programme is linked to navigation safety, river capacity and logistics along the Danube corridor.
Several large infrastructure projects remain inactive
Some major planned investments recorded no first-half spending. The planned tunnel connecting Karađorđeva Street and the Danube slope remained without execution despite a RSD 5 billion allocation for 2026. The proposed aquarium at Ušće and the new Natural History Museum building, with a combined allocation of RSD 2.89 billion, also recorded no expenditure. Projects with zero execution at midyear may still proceed later if design, procurement or contracting phases are completed, but delayed implementation can increase the risk of second-half spending pressure or transfers into future budgets.
Environmental and water projects lag behind transport spending
Flood protection and water-management programmes recorded limited execution. The Ministry of Agriculture allocated RSD 8 billion for river regulation and protection against damaging water events, but only around RSD 1 billion, or 13.7%, had been spent by June. No spending was recorded for the Svračkovo dam, despite a republican budget allocation of RSD 701.2 million.
Environmental support programmes included RSD 231.9 million in subsidies for environmentally friendly vehicles provided to private companies. Local governments received RSD 490.8 million for water-resource protection and RSD 349.9 million for the purchase, replacement and reconstruction of heating plants.
Healthcare construction programmes show low execution
Major healthcare construction projects also recorded modest first-half progress. The reconstruction of the University Clinical Centre of Serbia in Belgrade received RSD 233.7 million, equal to 6.7% of its annual allocation of RSD 3.5 billion. The Clinical Centre of Vojvodina in Novi Sad spent RSD 612.4 million from a planned RSD 2.77 billion.
No expenditure was recorded for the planned RSD 100 million reconstruction allocation at the University Clinical Centre in Niš. The figures relate to capital investment execution and do not include overall healthcare operating expenditure.
Energy transition programmes record limited spending
Energy-transition investments showed particularly low implementation rates. A biomass-market development programme financed through a KfW loan received only RSD 4.5 million from an initial annual allocation of RSD 538.9 million. No expenditure was recorded for energy-efficiency improvements in central-government buildings despite a budget allocation of RSD 582.9 million.
A separate programme covering energy efficiency in public buildings and renewable energy in district heating spent approximately RSD 7 million, around 1% of its RSD 721.2 million allocation. No spending was recorded for technical documentation related to the proposed Đerdap 3 pumped-storage hydropower plant, although only RSD 1 million had been allocated for the activity in 2026. Traditional energy-security measures progressed more quickly. Serbia spent RSD 3.5 billion from a RSD 6.5 billion allocation for consolidation of the underground coal-mining company Resavica. The Energy Reserves Administration used RSD 2.67 billion from the planned RSD 5.44 billion allocation for establishing and maintaining mandatory oil reserves.
The first-half execution figures show a budget structure heavily weighted towards defence procurement, EXPO-related construction, the National Stadium, Surčin transport links and Belgrade infrastructure, while wastewater treatment, environmental programmes, healthcare construction and energy-efficiency investments recorded substantially slower implementation.
