Serbia’s macroeconomic outlook for 2026 indicates continued expansion driven by consumption and external trade, while industrial production and construction remain weak, according to the latest MAT June forecast and official data.
Total industrial production is projected to increase by only 0.5% in 2026, while manufacturing is expected to decline by 1.0%. At the same time, retail trade is forecast to grow by 4.5% in real terms, goods exports by 7.0% in euro terms, and goods imports by 8.5%. Consumer price inflation is projected at 3.5% year-on-year in December 2026. The data point to a mixed growth environment rather than a uniform industrial expansion, with consumption and external demand offsetting weak manufacturing activity.
Industrial output and construction remain under pressure
The outlook confirms that Serbia’s industrial base remains fragile despite overall economic growth. In the first quarter of 2026, gross value added in industry and water and waste management fell by 0.7%, while construction declined by 5.1%. In contrast, trade, transport, storage, accommodation and food services increased by 4.9%, reflecting stronger performance in service-oriented sectors.
The structure highlights a widening gap between service-led growth and weaker performance in heavy industry and construction-linked activities.
The International Monetary Fund (IMF) projects Serbia’s GDP growth at approximately 2.8% in 2026 and 4.0% in 2027, following estimated growth of 2% in 2025, reinforcing expectations of moderate expansion rather than rapid acceleration.
Retail and consumption remain key growth drivers
Domestic demand continues to provide the strongest support to the economy. Retail turnover in April 2026 increased by 8.3% in nominal terms and 5.6% in real terms year-on-year. For the January–April period, real retail turnover rose by 7.9%.
Forecasts indicate some moderation ahead due to slower real wage growth and tighter credit conditions, although retail and wholesale trade are still expected to remain among the main contributors to GDP growth in 2026. The data indicate that household consumption continues to act as a stabilising force in the broader economic structure.
External trade improves but is expected to normalize
Serbia’s external position showed improvement in early 2026, although this trend may moderate over the full year. Between January and April, exports rose by 8.2%, while imports increased by 0.5%, resulting in a 26.1% reduction in the goods deficit.
However, full-year projections from MAT anticipate export growth of 7.0% and import growth of 8.5%, suggesting that import recovery in energy, intermediate goods and investment-related categories could narrow early gains.
Growth outlook shaped by energy, automotive and EU demand
The base-case scenario for 2026 places Serbia’s GDP growth in the range of 2.8% to 3.2%, with inflation expected between 3.5% and 4.0%, export growth near 7%, and continued but slower retail expansion. An upside scenario depends on stable operations at the Pančevo refinery, sustained growth in automotive production and stronger demand from the European Union. A downside scenario includes risks from energy price volatility, weaker German industrial output, disruptions in refinery operations, slower foreign direct investment execution and renewed import pressure.
Growth resilience but limited industrial momentum
The data indicate that Serbia’s economy remains resilient but continues to rely heavily on consumption and services rather than a broad industrial upswing. Economic performance in 2026 will depend on the balance between household demand, automotive exports, refinery stability, energy market conditions and the conversion of planned investment projects into operational capacity.
