Serbia entered mid-July 2026 with lower headline inflation but continued pressure from energy costs, infrastructure limitations and major corporate ownership changes. Consumer prices moderated as food costs declined, while energy, transport and hospitality expenses remained elevated. At the same time, Fitch Ratings maintained Serbia’s sovereign rating at BB+, the ownership structure of Addiko Bank Serbia entered a competitive takeover phase, and renewable-energy connection requests reached 18 GW, exceeding the country’s current grid capacity.
- Inflation Slows as Energy Costs Remain Elevated
- Fuel Measures Introduced Amid Oil Price Risks
- Fitch Keeps Serbia Below Investment Grade
- Addiko Bank Ownership Contest Intensifies
- SGB-SMIT Expands into Serbian Transformer Industry
- Renewable Connection Queue Reaches 18 GW
- Storage Projects Become Critical for Grid Flexibility
- Hospitality Sector Faces Uneven Cost Trends
- Belgrade Stock Market Remains Low-Liquidity Environment
Inflation Slows as Energy Costs Remain Elevated
Annual consumer inflation decreased to 2.7% in June 2026, compared with 3.5% in May, while the monthly consumer price index increased by 0.2%. The decline was mainly driven by food and non-alcoholic beverages, where prices fell 3.7% year on year. The category represents 31.64% of Serbia’s consumer basket, giving lower food prices a significant impact on the overall inflation rate.
Cost pressures remained visible in several important segments. Housing, water, electricity, gas and other fuels increased 9.5% compared with June 2025, while transport prices rose 7.7%. These categories account for 13.70% and 12.74% of the consumer basket, respectively.
The National Bank of Serbia has kept its key policy rate unchanged at 5.75%. The June inflation data did not create immediate pressure for monetary tightening, but energy-related price growth continues to limit the scope for faster monetary easing. The central bank expects inflation to move toward the upper end of its 1.5–4.5% target range later in 2026 due to base effects, with a sustainable return within the target band expected by mid-2027.
Fuel Measures Introduced Amid Oil Price Risks
The Serbian government reduced fuel excise duties for the period 13–19 July in response to renewed oil-price pressures. The excise duty on petrol was cut by 3.60 dinars to 64.80 dinars per litre, while the diesel levy was reduced by 3.70 dinars to 66.64 dinars per litre. Before the Middle East conflict began on 28 February, the duties stood at 72 dinars for petrol and 74.04 dinars for diesel.
Maximum retail prices for 10–17 July were set at 220 dinars per litre for diesel and 196 dinars per litre for petrol, representing increases of 20 dinars and 15 dinars, respectively, since the end of February. Serbia has also extended a ban on exports of diesel, petrol and crude oil until 31 July, prioritising domestic market supply. The fuel measures provide temporary support for consumers and transport-intensive industries but reduce public revenue from excise collection. Logistics, agriculture, construction and road transport remain affected as retail fuel prices have risen by more than the latest excise reductions.
Fitch Keeps Serbia Below Investment Grade
Fitch Ratings affirmed Serbia’s long-term foreign-currency sovereign rating at BB+ with a positive outlook, leaving the country one level below investment grade. The agency expects investment-led growth, lower public debt and continued resilience to external shocks. Political uncertainty and the possibility of early elections remain constraints on a potential upgrade.
Fitch forecasts that the general government deficit will remain within the 3% of GDP ceiling agreed with the IMF in 2026, compared with 2.4% in 2025. A recently announced support package worth approximately 0.6% of GDP is expected to be covered through stronger corporate income tax, VAT and non-tax revenues. Serbia’s sovereign ratings remain mixed among major agencies. S&P Global Ratings upgraded Serbia to investment grade in October 2024, while Fitch’s BB+ rating and Moody’s Ba2 assessment continue to influence lender risk evaluations and financing costs.
Addiko Bank Ownership Contest Intensifies
Serbia’s banking sector is entering a new consolidation phase as competing offers emerge for Addiko Bank.
On 14 July, Raiffeisen Bank International (RBI) reported acceptances for 9,890,151 Addiko Bank shares, representing 51.28% of the shares covered by its offer. RBI recently reduced its minimum acceptance condition to above 55%, bringing the transaction closer to completion ahead of the 22 July deadline. RBI is offering €26.50 per Addiko share, while Slovenia’s NLB has submitted a competing proposal of €37 per share and plans to reduce its own acceptance threshold to above 50%.
Serbia’s Alta Group, controlled by businessman Davor Macura, has tendered 1,878,167 Addiko shares, equivalent to 9.63%, into RBI’s offer. Under RBI’s proposed structure, Addiko subsidiaries in Serbia, Bosnia and Herzegovina, and Montenegro would be sold to Alta Group after completion of the acquisition. NLB has indicated that it would evaluate integration of Addiko operations across overlapping markets. Addiko currently serves around 900,000 customers through 155 branches and digital channels across five countries. The ownership change could influence competition in deposits, consumer lending, SME financing and the balance between domestic and foreign banking capital.
SGB-SMIT Expands into Serbian Transformer Industry
Industrial consolidation is also progressing in Serbia’s electrical equipment sector. Germany’s SGB-SMIT Group has agreed to acquire a majority stake in COMEL Transformatori, with completion expected in the second half of 2026, subject to regulatory approval. The transaction value and acquired stake percentage were not disclosed. COMEL repairs and overhauls power transformers rated up to 420 kV and manufactures oil-filled transformers for distribution and transmission networks up to 220 kV.
The company generated 2.5 billion dinars, or approximately €21 million, in revenue in 2025, compared with 2 billion dinars previously. Net profit increased from 111 million dinars to 218 million dinars. The acquisition places a Serbian engineering company within an international transformer group as European electricity networks require increased investment and equipment availability. COMEL provides a production and service base linked to Southeast European transmission operators, renewable projects and ageing utility infrastructure.
Renewable Connection Queue Reaches 18 GW
Serbia’s renewable energy expansion faces increasing pressure from limited grid capacity, with connection requests reaching 18 GW. Applications include 12 GW at transmission level and an additional 6 GW at distribution level. Installed renewable capacity has already reached three times the level recorded in 2022, but the current project queue exceeds Serbia’s near-term electricity system absorption capacity.
The Ministry of Mining and Energy is preparing stricter requirements for renewable projects, with discussions involving developers and investors including Enlight, Masdar Taaleri Generation, Elicio, Alcazar Energy, Fortis Energy and New Energy Solutions. The government has indicated that permits and connection requests alone will no longer be considered sufficient evidence of project readiness without confirmed grid capacity, balancing solutions and realistic implementation schedules.
Storage Projects Become Critical for Grid Flexibility
Planned pumped-storage facilities are expected to support renewable integration, including the Bistrica reversible hydropower project with an indicated capacity of 650 MW and the larger Đerdap 3 concept. Neither project provides an immediate solution, leaving battery storage, improved forecasting, stronger interconnections and stricter connection conditions as near-term tools for managing renewable growth.
Renewable projects with verified grid studies, secured transformer supply, defined curtailment rules and balancing strategies are expected to have stronger investment prospects. Grid delays of 12–18 months can affect project returns through higher financing costs, delayed power sales and extended equipment commitments.
Hospitality Sector Faces Uneven Cost Trends
Tourism-related businesses are experiencing mixed price trends. Restaurant and hotel prices increased 5.6% year on year in June, compared with 5.9% in May. Food served in hospitality venues increased 7.2%, alcoholic beverages rose 6.8%, and non-alcoholic beverages increased 6.4%. At the same time, accommodation prices declined 1.8%. The data indicates stronger pricing capacity in food and beverage services than in accommodation, while hotels continue facing pressure from utilities, wages and imported inputs. The sector recorded an average price increase of 9.5% in 2025, creating a higher comparison base for 2026 operations.
Belgrade Stock Market Remains Low-Liquidity Environment
Domestic equity trading showed limited activity despite slight index growth. The BELEX15 index increased 0.15% to 1,208.06 points on 13 July, supported by a 0.76% rise in Dunav Osiguranje shares. Total stock turnover reached only around 700,000 dinars, or approximately €6,000, compared with 6.1 million dinars in the previous session.
Major Serbian corporate developments, including the COMEL transaction, the Addiko ownership contest, renewable energy investment and potential energy-sector restructuring, continue to rely primarily on private transactions, foreign strategic capital, bank financing and state-supported investment rather than domestic equity markets.
