Serbia’s external position improved substantially in the first half of 2026, with stronger goods exports and continued services earnings helping to reduce the country’s current-account deficit. The current-account deficit fell by approximately 30% year on year to around €1.4 billion during the first six months of the year. The reduction was supported by a smaller merchandise trade deficit, while the country’s services surplus continued to generate a significant source of net foreign income.
Goods and services improve external balance
Serbia remains dependent on imports of machinery, energy, components and consumer products, creating structural pressure on the external balance when domestic consumption and investment accelerate. During the first half of 2026, however, goods exports increased faster than imports, easing that pressure.
At the same time, services continued to produce substantial net foreign earnings, providing an additional offset to the merchandise deficit and contributing to the reduction in the current-account shortfall.
Services sector expands foreign earnings
The growing services surplus reflects the expansion of internationally traded activities within the Serbian economy. IT, professional services, transport and other internationally traded services are generating foreign income that increasingly offsets part of the country’s structural merchandise deficit.
The development provides a growing source of external earnings alongside goods exports, reducing the extent to which Serbia’s external position depends solely on merchandise trade.
Foreign investment remains linked to income outflows
Despite the improvement in the current account, Serbia continues to record significant outflows through the income account. The country has accumulated a substantial base of foreign-owned companies, and dividends and other investment income generated by those businesses ultimately flow to their overseas shareholders. These outflows are linked to an economic development model that has relied heavily on foreign direct investment.
A related objective is increasing the proportion of economic value retained within Serbia through greater participation by domestic suppliers, engineering companies, intellectual property owners, management functions and locally owned exporters.
Smaller deficit reduces external financing needs
The approximately €1.4 billion current-account deficit recorded in the first half of 2026 represents a substantially smaller external shortfall than a year earlier. A narrower deficit reduces Serbia’s external financing requirements and provides greater capacity to manage external shocks.
The improvement also supports the central bank’s ability to maintain currency stability without relying excessively on new external borrowing or additional investment inflows. Serbia continues to have a structural external imbalance, but the first-half 2026 figures show a significant improvement in the direction of the country’s external accounts, supported by stronger goods exports and continued services income.
