Serbia’s economy expanded more rapidly in the second quarter of 2026, while construction activity and investment increased alongside stronger domestic demand and improved agricultural prospects. Real GDP grew 3.8% year on year in the second quarter of 2026, following 3.2% growth in the first quarter, according to the statistical office. On a seasonally adjusted basis, economic output increased 1.5% from the previous quarter.
The National Bank of Serbia (NBS) said in its September assessment that risks surrounding its 3.2% growth forecast for 2026 had shifted upward following stronger-than-expected second-quarter activity and improved agricultural prospects. For 2027, the central bank projected 4.5% economic growth, with the international EXPO exhibition contributing to the expected acceleration.
Construction and fixed investment show different trends
The latest national accounts recorded a 9.1% increase in construction value added in the second quarter, compared with a 3.3% rise in gross fixed investment. Construction value added and gross fixed investment measure different parts of economic activity and are not interchangeable. Their different growth rates nevertheless put attention on the composition of capital formation and the assets being created during the current investment cycle. Construction activity can generate employment and demand for materials, engineering and professional services while projects are being delivered. The longer-term economic return depends on the subsequent use of the completed assets.
Transport infrastructure can shorten delivery times and connect businesses with customers, while commercial facilities can accommodate new tenants and services. Event-related infrastructure can also support further activity where sustained demand and a viable operating model exist. The economic contribution can be lower where utilisation remains below expectations or where maintenance requirements exceed the income and productivity gains generated by an asset.
Businesses face different demand conditions after project completion
For private companies, opportunities associated with the construction cycle need to be distinguished from demand that can continue after individual projects are completed. A contract tied to construction activity can provide business during the delivery period, while decisions on new equipment, additional premises and permanent hiring depend on expectations for demand beyond the initial project or order cycle. Companies expanding capacity therefore need to assess whether that capacity can serve other customers or be redeployed once the current programme ends.
This distinction is particularly relevant to hospitality, transport, events and related services. A major international gathering can increase demand during the event period, but attendance alone does not establish the size of a permanent, year-round market. Operators must therefore account for their post-event customer base, operating expenses and competitive position when evaluating additional capacity. The same consideration applies to public infrastructure. Future operating and maintenance costs form part of the economic implications of an asset alongside its initial construction budget. An asset completed on schedule can still generate a financial burden if its future use and funding are unclear.
External buffers support the broader economic position
Serbia’s external position provides additional support to the economic outlook. The current-account deficit narrowed to €1.9 billion in January–July, while foreign-exchange reserves reached €30.8 billion at the end of August, according to the NBS. These indicators provide external buffers, but sustainable growth also depends on the generation of export and service income. External reserves can help absorb economic shocks but do not replace competitive production.
Domestic consumption is contributing to current activity as well. Household consumption increased 4% in real terms in the second quarter, supporting retailers and service providers while also generating demand for imported goods. The extent to which stronger spending translates into domestic economic activity depends partly on the ability of Serbian companies to supply the additional demand competitively. Where domestic capacity or product availability is insufficient, imports can account for a larger share of consumption.
Services and supplier capacity can extend investment effects
Engineering, project management, maintenance and specialised business services can provide opportunities for companies to build capabilities through the current investment cycle and apply them to subsequent projects. For those benefits to persist, companies need to retain skills and develop customers beyond the initial programmes. The longer-term value is linked to the capabilities developed through project activity rather than solely to a temporary increase in revenue.
The growth outlook therefore also depends on what follows the current period of construction and spending. Relevant indicators include the utilisation of completed infrastructure, performance of new facilities, private investment following public projects and the ability of domestic suppliers to secure repeat contracts. Serbia entered the final part of 2026 with economic growth running above the earlier forecast path, while the NBS raised the balance of risks around its 2026 projection after stronger second-quarter activity. The subsequent performance of newly completed assets and investment projects will determine their contribution beyond the construction cycle.
