Serbia’s domestic consumer market continued to expand in 2026, supported by higher real earnings, stronger retail turnover and increased household borrowing, despite weaker industrial output and declining formal employment.
Retail trade grew by 7.2% year on year in July-August, while tourist arrivals increased by 6.2% over the same period. Industrial production moved in the opposite direction, falling 1.5% year on year.
Rising Wages Strengthen Household Purchasing Power
Real wages increased by 8.5% in January-July, boosting household purchasing power. Average net monthly earnings reached approximately €1,034, while the average wage covered 108.6% of the average consumer basket.
Higher disposable income is supporting demand across the domestic economy, creating favourable conditions for retailers, residential developers, banks and service providers.
Household Lending Supports Consumer Demand
Bank lending is providing an additional source of spending power. Household loans increased by 19.6% year on year in August, with cash loans rising 21.9% and housing loans expanding 19.3%.
The growth in consumer credit and mortgage lending is reinforcing domestic demand, with implications for retail activity, residential property, tourism, consumer finance and digital services.
Wage Growth and Productivity Remain Key Factors
The sustainability of consumption-led expansion will depend partly on the relationship between wage increases and productivity. The National Bank of Serbia expects real-wage growth to moderate over time and move closer to productivity gains, helping to ease inflationary pressures.
Serbia enters 2027 with strong household demand, while the longer-term outlook will depend on the extent to which consumption is supported by productivity improvements and export earnings rather than credit expansion alone.
