Serbia’s net salaries rose 11.3% in nominal terms in the first five months of 2026, while labour costs outpaced productivity and the real exchange rate appreciated, the European Commission’s Serbia 2026 Report, dated 4 November 2026, said. The combination is creating growing competitiveness risks for manufacturers and exporters.
Minimum wages rose cumulatively by around 37% over 2025 and early 2026, the report calculated. A further 9.2% increase in the minimum hourly wage was approved for January 2027, after Serbia’s minimum wage reached around EUR 750 gross per month by early 2026.
Separately, Serbia’s unit-labour-cost-based real effective exchange rate appreciated by 5.8% in 2025, following a 13.4% surge in 2024. The Commission said its appreciation had become a considerable concern for the Serbian business community.
Labour-intensive suppliers in automotive components, machinery, metals, textiles and other export sectors are likely to feel the pressure first. Higher wages benefit household income and can support domestic demand, but the sustainability of Serbia’s growth model depends on productivity catching up.
Serbia’s industrial-policy challenge is to attract capital that raises automation, skills, energy efficiency and local value added, rather than relying on a widening gap between wages and output per worker.
