Belgrade, Serbia — Serbia’s unit-labour-cost measure appreciated by 5.8% in 2025, making domestic production more expensive in real terms and weakening exporters’ price competitiveness, the European Commission said in its Serbia 2026 Report, dated 4 November 2026. The report’s assessment shows pressure on exporters despite a nearly unchanged dinar-euro rate, while currency stability has supported financial stability.
The dinar depreciated by only 0.2% against the euro during 2025. Serbia’s central bank sold a net 580 million euros on the foreign-exchange market to maintain stability amid a weaker external position, according to the report. A stable currency reduces volatility for importers and households and can restrain imported inflation.
Serbia’s CPI-based real effective exchange rate appreciated by 2.4% in 2025. The unit-labour-cost measure had appreciated by 13.4% in 2024, before the slower rise last year. The figures indicate that Serbian production is becoming more expensive in real terms despite little movement in the nominal exchange rate.
For exporters, maintaining currency stability becomes costlier when wages and domestic prices rise faster than productivity and costs in trading partners. The report says Serbia’s competitiveness strategy cannot rely on exchange-rate stability alone and must rely more on productivity, automation and energy costs to make the adjustment.
