Serbia’s economic outlook for 2026 is characterized by growth without a full recovery in industrial production, according to MAT’s June forecast.
Total industrial production is projected to increase by 0.5%, while manufacturing output is expected to decline by 1.0%. At the same time, retail trade is forecast to expand by 4.5% in real terms, goods exports by 7.0% in euro terms, and goods imports by 8.5%, with consumer prices rising by 3.5% year-on-year (December-on-December). The profile reflects continued expansion in economic activity, but without a broad-based manufacturing rebound.
IMF Projection Confirms Moderate Growth Trajectory
The International Monetary Fund (IMF) projects Serbia’s GDP growth at approximately 2.8% in 2026 and 4.0% in 2027, following 2% growth in 2025. The assessment aligns with a moderated growth path in which Serbia continues to expand, but without strong industrial acceleration.
Industrial Output and Sector Performance Divergence
Data from the first quarter show real GDP growth of 3.2%, placing Serbia among higher-performing European economies. Gross value added declined in key segments, including a 0.7% drop in industry and water/waste management, and a 5.1% contraction in construction. In contrast, services expanded, with trade, transport, storage, accommodation, and food services rising by 4.9%.
The structure indicates that services and consumption remain the primary contributors to growth, while heavy industry and construction lag behind.
Retail Sector as Primary Domestic Growth Driver
Retail activity remains a key support for domestic demand. In April, retail turnover increased by 8.3% in nominal terms and 5.6% in real terms, while cumulative retail turnover from January to April rose by 7.9% in real terms.
MAT expects moderation in retail growth due to slower real wage expansion and tighter credit conditions, although retail and wholesale trade are still projected to remain among the main contributors to GDP growth in 2026.
External Trade Improves but Expected to Normalize
Serbia’s external position showed improvement in early 2026. Export growth reached 8.2% in January–April, while imports increased by only 0.5%, resulting in a 26.1% reduction in the goods deficit.
MAT’s full-year forecast anticipates imports rising by 8.5% and exports increasing by 7.0%, suggesting that early gains in trade balance may narrow as demand for energy, intermediate goods, and investment-related imports strengthens.
Macroeconomic Baseline and Risk Scenarios
The base-case outlook places Serbia’s GDP growth in 2026 at approximately 2.8% to 3.2%, with inflation projected in the 3.5% to 4.0% range. Export growth is expected near 7%, while retail activity is forecast to slow from early-year momentum but remain positive. The upside scenario depends on stable operations at the Pančevo refinery, continued expansion in automotive production, and stronger demand from the European Union. Downside risks include energy supply shocks, weaker German industrial output, disruptions in refinery operations, slower foreign direct investment execution, and renewed pressure on imports.
Growth Composition Driven by Consumption and Services
Despite positive macroeconomic indicators, Serbia’s growth pattern remains uneven. Economic expansion is increasingly driven by consumption, retail activity, and service-sector performance rather than industrial production. Key variables shaping 2026 include automotive exports, refinery stability, energy pricing dynamics, EU demand conditions, and the timing of investment projects transitioning into operational capacity. The overall trajectory reflects sustained economic resilience, but without a fully synchronized industrial recovery across Serbia’s manufacturing base.
