Serbia’s economic growth outlook for 2026 has strengthened after second-quarter activity exceeded preliminary estimates and agricultural production improved, increasing the possibility that growth will surpass the National Bank of Serbia’s (NBS) 3.2% forecast.
Real GDP expanded 3.8% year on year in the second quarter, 0.2 percentage points above the initial estimate. The stronger performance prompted the central bank to assess the risks around its August growth projection as tilted to the upside. Domestic demand remains the main source of expansion, supported by household consumption, investment and infrastructure spending.
Expo expected to lift 2027 growth
The NBS projects economic growth of 4.5% in 2027, when Serbia’s hosting of Expo is expected to generate increased activity in construction, tourism and services. The expected acceleration also raises a distinction between growth generated by the Expo and investment cycle and Serbia’s underlying expansion capacity. The central bank estimates the economy’s medium-term potential growth rate at around 3.5% annually once temporary factors associated with the investment and Expo cycle have faded.
Investment structure will shape longer-term growth
The composition of economic expansion will be important for determining how much of the current investment cycle translates into lasting productive capacity.
Infrastructure spending, foreign direct investment (FDI) and corporate borrowing could create additional industrial and export capacity, allowing part of the investment cycle to support potential output beyond Expo-related activity. A concentration of growth in construction and temporary consumption would provide a different trajectory, with expansion potentially moving back toward Serbia’s underlying growth rate after the investment cycle weakens.
Exports provide additional support
External trade has also developed more favourably than expected during 2026. Exports have shown greater resilience, while import growth has been slower, reducing the negative contribution from net exports to overall economic growth. The NBS expects net exports to make a smaller negative contribution during 2026 and to contribute positively in 2027. The central bank partly attributes the expected improvement to higher exports of tourism and business services associated with Expo.
The improved near-term outlook therefore coincides with a transition in the structure of Serbia’s growth, as infrastructure construction and investment commitments are increasingly followed by completed industrial capacity, productivity gains and export performance. These factors will determine whether economic growth can remain close to or exceed the economy’s estimated 3.5% medium-term potential rate after the Expo-related spending cycle subsides.
