Serbia’s economy entered 2026 with stronger trade performance, lower inflation and improved external stability, but the structure of growth is becoming increasingly dependent on household consumption, wage increases and retail lending.
- GDP expands as inflation stabilises
- Household income supports consumption growth
- Exports improve as trade deficit narrows
- Imports reflect continued industrial demand
- Current account improves while FDI declines
- Investment cycle faces pressure from weaker capital inflows
- Fiscal position remains supportive despite higher deficit
- Reserves and exchange rate remain stable
- Labour market remains stable amid wage growth
The latest macroeconomic data from the Ministry of Finance projects 3% real GDP growth in 2026, following estimated growth of 2% in 2025. Exports are expanding faster than imports, inflation has moved closer to monetary-policy targets, and the external deficit has narrowed. Investment indicators show a weaker trend. Foreign direct investment (FDI) declined sharply during 2025 and remained limited in the first four months of 2026, while corporate lending has expanded much more slowly than household borrowing.
GDP expands as inflation stabilises
The Ministry of Finance estimates Serbia’s nominal GDP will reach RSD 11.07 trillion in 2026, compared with approximately RSD 10.39 trillion in 2025 and RSD 9.75 trillion in 2024. The projected nominal increase of around 6.5% combines 3% real growth with an estimated GDP deflator of approximately 3.4%, indicating a lower contribution from price increases compared with the period following the energy crisis.
In euro terms, Serbia’s GDP reached approximately €88.7 billion in 2025, while GDP per capita increased to around €13,545. This compares with GDP of €83.3 billion and GDP per capita of €12,641 in 2024. The increase reflects both economic expansion and exchange-rate stability. Based on the projected dinar GDP figure and the prevailing exchange-rate range, Serbia’s economy could approach or exceed €94 billion in 2026. Inflation continued to moderate. Average consumer-price inflation during January–May 2026 was 2.9%, compared with 3.8% in 2025 and 4.6% in 2024. End-period inflation reached 2.4%, down from 2.7% at the end of 2025, moving closer to the centre of the National Bank of Serbia’s inflation target corridor.
Household income supports consumption growth
Lower inflation has strengthened household purchasing power. Average net salaries reached RSD 119,504 during January–April 2026, with the Ministry reporting 8.6% real wage growth. Average net wages had increased to RSD 109,462 in 2025, compared with RSD 98,143 in 2024. Average pension payments reached RSD 56,847, accompanied by reported real growth of 9%. The increase in wages and pensions has supported household consumption, housing demand, construction activity and domestic services.
This trend is reflected in banking data. Household loans increased from approximately RSD 1.94 trillion at the end of 2025 to RSD 2.08 trillion by May 2026, representing growth of 7.2% in five months. Corporate lending increased much more slowly, rising only 0.8%, from RSD 2 trillion to RSD 2.01 trillion. Total credit expanded by around 4% to RSD 4.09 trillion, but most of the increase came from household borrowing. Households now represent approximately 50.9% of combined lending to companies and individuals, overtaking corporate borrowers in the domestic banking portfolio.
Exports improve as trade deficit narrows
Serbia’s foreign trade performance provided the strongest support for economic improvement in early 2026. Goods exports reached €14.7 billion in January–May 2026, increasing 7.7% compared with the same period in 2025. Imports totalled €17.68 billion, but increased by only 1%.
As a result, the merchandise trade deficit narrowed to €2.98 billion. Based on reported growth rates, the comparable deficit during the first five months of 2025 was approximately €3.86 billion, meaning the shortfall decreased by around €876 million, or nearly 23%. Export coverage of imports improved from an estimated 78% to 83.1%.
Exports to the European Union reached €9.27 billion, representing approximately 63% of Serbia’s total merchandise exports. The EU remains the main market for Serbian manufacturing, metals, electrical equipment, automotive components, agricultural goods and processed products.
Imports reflect continued industrial demand
Import data show that domestic production activity has not stopped. Serbia imported €6.12 billion of intermediate goods and €3.31 billion of capital goods during January–May. Together, these categories represented approximately 53% of total merchandise imports.
Intermediate goods accounted for 34.6% of imports, while capital goods represented 18.7%. A combination of stronger exports and moderate import growth can indicate improved domestic production efficiency and higher export value. Slower capital-goods demand can also signal postponed investment. The weaker corporate-credit figures and reduced FDI inflows indicate that investment activity remains a key area to monitor.
Current account improves while FDI declines
Serbia recorded a current-account deficit of €405 million in January–April 2026. This compares with annual deficits of €4.3 billion in 2025 and €3.79 billion in 2024. The 2025 current-account deficit represented approximately 4.9% of GDP, compared with 4.5% in 2024 and 2.4% in 2022.
The early-2026 improvement reflects stronger goods trade, although annual results will depend on services exports, income payments, remittances and energy-import patterns. The main weakness remains foreign direct investment. Net FDI declined from approximately €4.6 billion in 2024 to €2.28 billion in 2025, a fall of slightly more than 50%. FDI contribution dropped from 5.5% of GDP to approximately 2.6%. Only €357 million of net FDI was recorded in January–April 2026. This amount covered approximately 88% of the current-account deficit during the same period, but remains significantly below Serbia’s recent investment levels.
Investment cycle faces pressure from weaker capital inflows
For much of the previous decade, Serbia financed external deficits largely through foreign investment rather than debt-generating portfolio flows. Investments by companies including HBIS, Zijin Mining, Continental, Bosch, Nidec, Brose, Michelin, Linglong and automotive suppliers expanded manufacturing capacity, exports and employment outside Belgrade. A prolonged reduction in FDI would increase reliance on sovereign borrowing, domestic banking finance, retained corporate earnings and remittances.
The issue is particularly important for Serbia’s next infrastructure and industrial investment cycle. Projects involving electricity transmission, renewable-energy connections, storage, mining, processing, industrial decarbonisation and wastewater infrastructure require substantial long-term capital. These projects also face permitting, grid-connection and implementation challenges that can delay conversion of announced investments into productive assets.
Fiscal position remains supportive despite higher deficit
Serbia’s public finances provide greater flexibility compared with previous years. General government debt declined from 46.9% of GDP in 2024 to 44.7% in 2025, nearly 24 percentage points below the 2015 peak of 68.4%. The fiscal deficit widened from approximately 2% of GDP in 2024 to 2.4% in 2025. Consolidated expenditure increased to 43.36% of GDP, while revenue reached 40.93%.
The primary deficit rose to approximately 0.76% of GDP, compared with 0.26% in 2024. The difference between the overall and primary balances indicates an interest burden of around 1.64% of GDP, equivalent to approximately RSD 171 billion based on the 2025 GDP level. Future debt reductions will increasingly depend on fiscal discipline rather than nominal GDP growth as inflation continues to moderate.
Reserves and exchange rate remain stable
Foreign-exchange reserves increased from €29.01 billion at the end of 2025 to €29.88 billion in May 2026, an increase of around 3%. Household foreign-currency savings rose from €16.16 billion to approximately €16.51 billion. The dinar remained stable against the euro.
The end-period exchange rate moved from RSD 117.282 per euro in 2025 to RSD 117.418 per euro in May 2026, representing depreciation of only 0.12%. The average exchange rate stood at approximately RSD 117.395 per euro. Exchange-rate stability has supported inflation control, preserved euro-denominated income values and reduced debt-service volatility for euro-linked borrowers.
Labour market remains stable amid wage growth
Employment levels remained broadly unchanged. Average employment stood at approximately 2.314 million people in January–May 2026, compared with 2.319 million in 2025. Registered unemployment averaged approximately 343,000 people. The ILO unemployment rate reached 8.9% in the first quarter of 2026, compared with a 2025 four-quarter average of 8.7%.
The labour market is no longer producing major employment gains, but wages continue to rise due to labour shortages, public-sector adjustments, minimum-wage increases and competition for skilled workers. Serbia’s 2026 outlook therefore combines stronger trade performance, lower inflation, stable reserves and reduced public debt with weaker investment indicators.
Exports increased by 7.7%, while corporate lending grew by less than 1% and early-year FDI reached only €357 million. At the same time, household lending, wages and pension payments continued to rise. The economy’s near-term growth depends increasingly on domestic demand, while longer-term expansion will depend on renewed investment in industrial capacity, infrastructure, energy systems and higher-value production.
