Serbia’s economy has experienced a slower than anticipated growth, with a reported gross domestic product (GDP) increase of only 2 percent over the past year. This figure falls short of earlier projections and aligns with trends observed in other Central and Eastern European nations, as noted during a macroeconomic panel discussion supported by the Swedish Government. The International Monetary Fund (IMF) estimates that Serbia’s real GDP growth for the current year will reach approximately 3 percent, which still lags behind growth rates expected in 2024 and comes with significant caveats.
IMF representatives emphasized that although Serbia’s economy demonstrates resilience, achieving sustained growth above 3 percent necessitates enhanced inflows of both foreign and domestic investments. Experts at the panel highlighted the importance of investing in human capital, improving the business environment, and attracting sophisticated, technology-driven capital expenditures to stimulate a more vigorous economic recovery. Without these investments, growth is likely to be hindered by existing structural challenges.
The IMF’s representative in Serbia pointed out that the country ranks highest in the Western Balkans on the readiness index for adopting artificial intelligence technologies, indicating potential that could be unlocked through advancements in education and workforce skill development. However, there was a consensus among panelists that Serbia’s national growth model requires recalibration to effectively tackle ongoing issues.
Foreign trade remains a critical aspect of Serbia’s economic outlook. The European Union is Serbia’s primary external market, accounting for approximately two-thirds of its export volumes. In the previous year, Serbian exports rose by 8.4 percent, surpassing the 7.2 percent increase in imports; nevertheless, the country recorded a significant trade deficit of €8.8 billion. Experts suggested that reducing logistical barriers at borders and ensuring consistent procedures could bolster the competitiveness of Serbian exporters.
Concerns were also raised regarding a notable decline in foreign direct investment (FDI), which fell to about 3.8 percent of GDP in 2025—approximately half of the previous year’s level. Despite public debt remaining relatively low at under 50 percent of GDP and projected to rise only slightly as the budget deficit approaches around 3 percent of output by 2026, this downturn in investment highlights an urgent need for policies aimed at restoring investor confidence and encouraging capital formation.
Panel discussions also addressed broader economic transformations, emphasizing the necessity to modernize labor laws, enhance commercial dispute resolution through digitalization, and align regulatory frameworks with evolving EU standards. Adapting to a global economy increasingly influenced by technological innovation and sustainability criteria was regarded as essential for Serbia’s long-term growth prospects.
