Serbia’s current-account deficit narrowed to €1.4 billion in the first half of 2026, down about 30% year on year, despite a sharp deterioration in the country’s energy trade balance as Middle East tensions drove up oil prices. The latest figures in the National Bank of Serbia’s August Inflation Report show that exports of goods and services increased 7.9% from a year earlier, while imports rose 4.9%. Export coverage of imports reached a record average of about 95% during the period.
The improvement reflects both longer-term changes in Serbia’s export capacity and developments during 2026. The NBS links the structural component to past foreign investment, expanded manufacturing capacity and stronger service exports.
Trade deficit continues to narrow
Serbia’s goods-and-services trade deficit has declined substantially over the past decade. It averaged 13.5% of GDP in 2011-2013, compared with 4.7% in 2023-2025. In the first half of 2026, the deficit fell further to 3.1% of GDP.
Manufacturing and mining were among the main contributors to export growth. Motor-vehicle exports increased 51.1% in the first half, following expanded production by Stellantis at its Kragujevac plant. Mining exports rose 34.7%, supported in part by copper prices, which increased by almost 40% globally. Manufacturing exports overall grew 9.0%, with higher exports recorded in 15 of 23 manufacturing branches.
Energy imports put pressure on the external balance
The energy account developed in the opposite direction. Serbia recorded an energy deficit of about €2 billion in the first six months, an increase of €252.4 million compared with the same period of 2025. Oil and petroleum products accounted for the main deterioration. The average price of imported crude oil was 29.5% higher, while prices for imported petroleum products increased by about 17%. The impact became more pronounced from March through June following the escalation of tensions in the Middle East. During that period, energy imports increased by approximately €268.6 million year on year, while energy exports declined by €152.7 million. The resulting deterioration in the energy balance was about €421.4 million.
Services strengthen Serbia’s export position
Services provided another source of external-balance support. Service exports increased 5.9% in the first half, led by business services, ICT, transport and a recovery in tourism. Service imports rose at a slower rate of 4.4%. In the second quarter alone, Serbia recorded a €703 million services surplus, while service exports increased 10.9% year on year. The figures indicate that the improvement in the current account was not driven solely by merchandise trade. Expanding service exports also contributed to offsetting the higher cost of imported energy.
Foreign investment remains an important financing source
Gross foreign direct investment inflows amounted to €843.5 million in the second quarter, equivalent to 3.5% of GDP and approximately 12% below the level recorded a year earlier. Net FDI inflows nevertheless reached €633.9 million, an increase of 26% year on year, as Serbian residents reduced their investments abroad. Gross FDI exceeded €1.2 billion in the first half, with reinvested earnings and equity capital accounting for the largest portions.
Portfolio financing was substantially larger during the second quarter. Net portfolio inflows reached €3.9 billion, reflecting international sovereign and corporate bond issuance. Serbia issued approximately €3 billion equivalent of Eurobonds in three tranches, while companies issued around €1.95 billion equivalent. A significant portion of the funds was directed toward refinancing existing bonds or repaying financial loans rather than financing new consumption.
Bond financing changes external funding mix
The composition of capital inflows in 2026 has therefore included a much larger role for market borrowing and liability management alongside direct investment. The NBS expects the current account to remain manageable. Its forecast for the 2026 current-account deficit has been reduced to 4.1% of GDP, while the deficit is projected to decline to around 3% of GDP in 2027 as Expo-related tourism and business-service exports strengthen.
For 2028, the deficit is expected to return toward an estimated equilibrium level of approximately 4% of GDP. Net FDI is projected to average about 3% of GDP over the coming years. This would not completely finance every projected current-account deficit, leaving portfolio investment and other financing channels as additional sources of external funding.
Energy exposure and investment imports remain key risks
Serbia continues to be a net energy importer, leaving its external position exposed to changes in global oil prices. The NBS’s pessimistic geopolitical scenario shows the potential for higher energy costs to affect inflation, economic growth and external demand. At the same time, large infrastructure projects are expected to increase imports of capital goods and intermediate materials as the investment programme associated with the Expo period reaches its peak.
Serbia’s export structure has nevertheless become broader. Automotive manufacturing, copper and other mining activities, business services, ICT and tourism now contribute alongside more traditional export sectors. In the first half of 2026, the €1.4 billion current-account deficit was recorded despite the substantially higher cost of imported energy, as stronger goods and services exports offset part of the deterioration in the energy balance.
