Serbia’s economy continued expanding in early 2026, with growth supported by industrial activity, household demand, tourism and investment-related sectors. Real gross domestic product increased by 3.2% year-on-year in the first quarter of 2026, while economic indicators for April and May pointed to continued momentum during the second quarter.
Available activity data showed broad-based gains across several parts of the economy. Industrial production increased by 2.1%, real retail turnover grew by 5.9%, and tourist arrivals rose by 7.9% compared with the same period a year earlier.
Manufacturing and Mining Support Industrial Expansion
Industrial performance remained uneven across sectors, with manufacturing and mining contributing positively while energy production continued to weigh on overall output. During April and May, manufacturing production increased by 3.6%, while mining output expanded by 4%. In contrast, energy-sector production declined by 8.1%, remaining a notable weakness within industrial activity.
Construction-related indicators showed improving conditions. Production of construction materials increased by 2.8%, while the number of issued building permits in April rose by 4.3%, indicating stronger activity in the construction segment.
Agriculture Provides Additional Growth Support
Agricultural output also showed stronger results at the beginning of the year. First-quarter agricultural production was reported to be 7% higher year-on-year, while preliminary assessments pointed to increased wheat output and higher production across several fruit categories. The final agricultural performance will depend on weather conditions throughout the remainder of the growing season, including rainfall levels, temperatures and other seasonal factors.
NBS Forecasts Faster Expansion in 2027
The National Bank of Serbia (NBS) expects real GDP growth of 3% in 2026, followed by a stronger expansion of 4.5% in 2027.
Growth in household consumption is expected to be supported by higher disposable income, while investment activity is projected to benefit from infrastructure projects linked to the “Leap into the Future—Serbia Expo 2027” program. Fixed investment is forecast to increase by 4% in 2026 and by 4.2% in 2027, reflecting continued spending on infrastructure-related projects.
Export Contribution Expected to Improve After Expo Investments
The structure of economic growth is expected to shift between 2026 and 2027. In 2026, stronger household consumption and investment demand are expected to increase imports, while weaker external demand limits export growth. As a result, net trade is projected to reduce the overall contribution to GDP growth. In 2027, Expo-related tourism activity and service exports are expected to improve external performance, allowing net exports to become a positive contributor to economic expansion.
Infrastructure Projects Become Key Economic Test
The impact of investment activity will depend on the implementation of planned projects. Infrastructure spending can support short-term economic growth through construction activity and equipment procurement, but its longer-term contribution will depend on improvements in transport systems, urban capacity, tourism infrastructure and private-sector productivity. Project delays, higher-than-planned costs or increased reliance on imported inputs could reduce the domestic economic impact of the investment cycle.
The 2027 growth outlook is therefore closely linked to Serbia’s ability to convert major public investments into long-term productive assets. Visitor flows connected with Expo activities could provide temporary economic support, while improvements in infrastructure, business connections and urban services will determine the continuation of benefits beyond the event period.
