Serbia’s merchandise trade performance improved during the first eight months of 2026, with exports growing faster than imports and the overall trade deficit narrowing. Energy trade moved in the opposite direction, as a substantial fall in export value outweighed a relatively modest increase in imports, according to MAT.
Energy product imports increased by approximately EUR 110 million, or 3.6%, compared with the same period a year earlier. The value of energy exports, however, dropped by around EUR 345 million, contributing to the deterioration in the sector’s trade balance. Electricity and agricultural exports combined declined by EUR 312 million, or nearly 24%, with lower electricity shipments accounting for an important part of the decrease.
Hydropower Output Remains Below Historical Average
Electricity generation conditions provide part of the explanation for the weaker export performance. Hydroelectric production improved compared with 2025, but remained approximately 16% below its multi-year average, MAT reported.
The electricity, gas and steam supply sector recorded a cumulative decline of 4.2% between January and August, despite a modest year-on-year increase in August. The monthly improvement therefore came against a weaker previous-year comparison, while overall sector performance remained below normal levels.
Lower Generation Limits Regional Electricity Trading
Serbia’s electricity exports depend on the ability of domestic generators to supply the interconnected Southeast European market. Hydrological conditions, reliable thermal generation and flexible production capacity determine how much electricity can be made available for cross-border sales.
When generation is strong, utilities and electricity traders can use regional price differences to increase export revenues. When domestic production weakens, the same cross-border connections can instead facilitate imports, including during periods when purchasing conditions are less favourable.
Renewables Increase Need for Flexibility and Grid Capacity
The development of new renewable generation can expand Serbia’s electricity supply, but variable output also increases the importance of storage, hydropower flexibility, transmission infrastructure and balancing capacity.
The country’s external energy performance is therefore closely linked to the physical reliability and flexibility of its electricity system. Establishing a stronger position in regional electricity trade requires export capacity supported by consistent generation and infrastructure, rather than relying primarily on temporary production surpluses during favourable hydrological conditions.
