Serbia’s external position recorded a significant improvement in early 2026, with the current-account deficit narrowing sharply during the first quarter, supported by stronger services inflows and higher remittance transfers, according to MAT data.
The current-account deficit declined to €179.3 million in January–March 2026, representing a 72.5% year-on-year reduction. The improvement was driven by a reduced goods deficit, a rising services surplus of €778.2 million, and remittances totaling €913.2 million, which increased by 31.8% compared with the same period last year.
Services Sector Becomes Key External Stabiliser
The services balance played a central role in improving Serbia’s external accounts, with a surplus of €778.2 million recorded in the first quarter. This reflects performance across sectors including IT, transport, business services, professional services, logistics, tourism and regional service operations.
These activities generate foreign-exchange inflows with lower dependence on imported inputs compared with goods-producing industries, strengthening Serbia’s ability to earn external income through services-based sectors while supporting wage growth and urban economic activity.
Goods Trade Remains Structurally in Deficit
Despite improvements in services, Serbia continues to record a structural goods deficit driven by imports of machinery, energy, industrial equipment, vehicles and other production inputs.
This import profile continues to exert pressure on the external balance, as industrial and consumer demand relies heavily on imported components and energy supplies.
Remittances Provide Additional External Support
Remittance inflows reached €913.2 million in the first quarter of 2026, marking a 31.8% increase year on year. These inflows contribute to household income, consumption activity, banking system deposits and foreign-exchange stability. While remittances provide a stabilising effect on the current account and domestic demand, they represent financial inflows rather than investment-driven production growth.
Composition of External Adjustment Under Review
The improvement in Serbia’s external position reflects a combination of stronger services earnings and higher remittances alongside a narrower goods deficit. The structure of the adjustment raises questions about underlying drivers. A reduction in imports linked to delayed capital investment can improve the current account in the short term but may also limit future productive capacity expansion if machinery and equipment purchases slow.
Balance Between Services, Trade and Investment Flows
The current configuration shows increasing reliance on services exports and remittance inflows to offset persistent goods import requirements. A more balanced external position would combine diversified goods exports, sustained services growth, stable remittance inflows and continued productive investment in industrial capacity.
The data for early 2026 indicate that Serbia is moving closer to that balance, although services and remittances currently account for a larger share of external stability than goods-based export expansion.
