Serbia recorded a significant improvement in its external position during the first five months of 2026, as stronger exports and moderate import growth reduced pressure on the current account. The current-account deficit narrowed to €560.6 million, representing a reduction of approximately €1.2 billion compared with the same period in 2025.
The improvement was mainly supported by stronger trade performance. Exports of goods and services increased by 7.3%, while imports rose by only 2.3% during January–May.
Manufacturing and Service Exports Drive Trade Improvement
Goods exports recorded an 8% increase during the period, with manufacturing exports expanding by 8.6%. Motor-vehicle exports were among the strongest contributors, increasing by 50.8%. Service exports also continued to expand, rising by 5.7%, supported primarily by transport services, information and communications technology activities and business services.
Import growth remained limited compared with export expansion. Goods imports increased by 2.7%, mainly due to higher demand for intermediate inputs, while service imports grew by only 1.1%. Additional current-account components also improved. The secondary-income surplus increased by €305 million, while the primary-income deficit decreased by €26.4 million compared with the previous year.
Foreign Investment Fully Covers Current Account Deficit
Foreign direct investment continued to provide stable external financing for Serbia’s economy. Gross FDI inflows reached €893 million between January and May 2026, while net inflows totaled €596 million. Net foreign direct investment was sufficient to fully cover the current-account deficit recorded during the period. The structure of previous investment inflows has also played an important role in strengthening external capacity. Between 2018 and 2025, Serbia attracted €28.4 billion in FDI, with almost 60% allocated to tradable sectors.
Manufacturing received approximately €8.4 billion during that period, while investment in scientific, technical and innovation-related activities became increasingly significant. Investment directed toward export-oriented sectors supports external sustainability by expanding production capacity rather than primarily financing domestic consumption or real-estate development.
Import Pressures Expected During Rest of 2026
Despite the stronger performance at the start of the year, external risks remain. The National Bank of Serbia (NBS) forecast in May that the full-year current-account deficit would reach approximately 6% of GDP. Higher domestic consumption, infrastructure construction activity and increased energy costs are expected to contribute to faster import growth during the remainder of 2026.
The stronger-than-expected results from January through May could lead to a smaller annual deficit than previously projected, but the early-year performance does not yet provide a complete picture of the full-year external balance.
Expo 2027 Expected to Support Service Exports
For 2027, the current-account deficit is projected to narrow to 4% of GDP, with the expected increase in tourism and other service exports linked to Expo 2027 identified as a key factor. The impact will depend on visitor spending and the capacity of Serbia’s service sectors to accommodate higher demand, rather than solely on the organization of the event.
Serbia’s external position has improved through stronger export performance, continued foreign investment inflows and a narrower trade imbalance. The next phase will depend on maintaining these gains as investment activity and energy-related imports increase.
