Serbia’s external financial position strengthened in the first months of 2026, supported by stronger export performance, expanding services revenues and a narrower current-account deficit. At the same time, bank lending accelerated, deposits continued to grow and foreign-exchange reserves remained high, while foreign direct investment recorded a significant slowdown.
Broad money continued to increase during the period. The M3 monetary aggregate reached RSD 5.55 trillion at the end of April, approximately 9.6% higher year on year. M2 rose to RSD 2.79 trillion, while M1 increased to RSD 2.06 trillion.
Deposits Expand While Bank Lending Accelerates
Deposits held by the non-financial sector increased to RSD 5.09 trillion, representing annual growth of around 10%. Dinar-denominated deposits reached RSD 2.33 trillion, while foreign-currency deposits climbed to RSD 2.76 trillion. Bank lending expanded at a significantly faster pace. Claims of banks on the non-financial sector reached RSD 4.22 trillion, approximately 17.5% above April 2025 levels.
Dinar claims increased to RSD 1.70 trillion, while foreign-currency and foreign-currency-indexed claims reached RSD 2.52 trillion. The faster growth of credit compared with deposits indicates stronger financing activity among households and companies. Continued divergence between lending and deposit growth could gradually reduce the banking sector’s liquidity buffer. The existing deposit base remains above total claims, limiting immediate funding pressures.
Foreign-currency exposure remains a major feature of Serbia’s financial system. Around 60% of bank claims are denominated in foreign currencies or indexed to them, leaving borrowers closely linked to euro interest-rate movements and the exchange-rate framework of the National Bank of Serbia (NBS).
Foreign Reserves Remain High Despite Decline Since December
Serbia’s foreign-exchange reserves remained substantial at the beginning of the second quarter. The NBS held €28.16 billion in foreign-exchange reserves at the end of April, around €451 million higher than in April 2025, but €852 million lower than in December.
Commercial banks held an additional €3.12 billion in foreign-exchange reserves. The reduction since December partly reflected balance-of-payments financing and central-bank operations. Despite the decline, the overall reserve level continued to provide Serbia with a significant external buffer and support confidence in the dinar.
Current Account Deficit Narrows on Stronger Exports and Services
Serbia’s current-account deficit declined sharply during January-April. The deficit narrowed to approximately €405 million, compared with around €1.34 billion in the same period a year earlier. The improvement of more than €930 million reduced the country’s external financing requirement. The goods deficit decreased to approximately €1.76 billion, supported by stronger export growth.
At the same time, the services surplus expanded to around €922 million, reflecting the growing contribution of service exports including ICT, transport, tourism, business services and related activities. Secondary income, including remittances and other transfers, generated a cumulative surplus of approximately €1.85 billion. These inflows continued to offset a significant share of the merchandise trade deficit and the negative primary-income balance linked to dividends, reinvested earnings and interest payments.
April alone recorded a current-account deficit of €274 million, compared with €688 million in April 2025. During the month, the goods deficit improved from €809 million to €637 million, while the services surplus more than doubled, increasing from €118 million to €259 million.
Foreign Direct Investment Declines as Credit Becomes Stronger Growth Driver
The composition of external financing became less favourable due to weaker foreign direct investment inflows. Net new direct-investment liabilities reached approximately €601 million during January-April, compared with around €1.07 billion a year earlier. This represents a decline in inward FDI of roughly 44%.
The lower FDI inflow did not create immediate balance-of-payments pressure because the current-account deficit also narrowed. However, foreign investment has played an important role in Serbia’s economic development by supporting manufacturing facilities, mining projects, real estate activity, renewable energy investments and infrastructure-related development. Domestic credit expansion has become a stronger source of economic support. The impact of faster lending growth will depend on how financing is allocated, with loans for productive equipment, export capacity and energy efficiency having different effects from credit directed mainly toward consumption or property-related activity.
Serbia entered the second quarter of 2026 with improved external accounts and a well-funded banking system. Key financial indicators remain linked to the pace of credit expansion, foreign-currency exposure and the continued slowdown in direct investment inflows, while exports and services revenues are playing a larger role in external adjustment.
