Serbia’s economic growth accelerated in the second quarter of 2026, with gross domestic product expanding 3.8% year on year, according to revised data from the Statistical Office. The figure was higher than the previously estimated 3.6%, marking a significant improvement from the 3.2% annual growth recorded in the first quarter. On a seasonally adjusted basis, GDP increased 1.5% quarter on quarter, compared with just 0.2% growth in the first three months of the year. The latest figures point to stronger activity across several parts of the economy rather than growth concentrated in a single sector.
Construction and services strengthen
Construction recorded one of the largest improvements, with output rising 9.1% year on year after contracting 5.1% in the first quarter. Professional, scientific, technical and administrative services expanded 5.8%, while trade, transport, accommodation and food services increased 4.4%.
The construction rebound comes as Serbia continues to execute major motorway, expressway and railway projects alongside EXPO 2027 infrastructure, healthcare facilities and energy investments. Large private property developments are also underway in Belgrade and several regional centres. Construction has therefore regained an important role in economic activity, although several major infrastructure projects have already required additional financing and budget reallocations. The 2025 final budget account showed spending on the Morava Corridor at around RSD 41 billion, compared with an original allocation of RSD 30 billion. Around RSD 22 billion was also spent on a new EXPO-related programme that had not been included in the initial budget.
Household demand remains firm
Household consumption increased 4.0% in the second quarter, supported by higher wages, low unemployment and continued credit growth. Serbia’s unemployment rate declined to 7.2% in the second quarter, although employment was lower than a year earlier and inactivity increased. The combination points to tighter labour availability, creating additional wage pressure for companies and increasing incentives for automation. The government’s revised 2026 budget also contains a substantial package of household transfers and other measures, while planned expenditure is increasing more rapidly than revenue.
Investment and capital spending
Gross fixed-capital formation rose 3.3%, maintaining positive investment momentum. Serbia continues to attract foreign direct investment in areas including automotive components, batteries, robotics, mining, renewable energy and manufacturing. At the same time, public capital expenditure remains high relative to GDP.
Under the revised budget, capital spending is planned at approximately RSD 779.9 billion, equivalent to around 7% of GDP. The investment pattern is also reflecting changes in Serbia’s labour market. With the workforce no longer expanding sufficiently to support growth through additional employment, companies are increasingly relying on automation, machinery and higher output per worker. Recent investments involving humanoid robots, advanced batteries and higher-value automotive components are part of that broader shift.
Imports outpace exports in real GDP terms
Exports of goods and services increased 4.1% in real terms during the second quarter, while imports rose 5.2%. The faster growth in imports reflects continued domestic demand, even as Serbian exporters increased their activity. The GDP figures do not necessarily contradict separate merchandise-trade data showing an improvement in the goods deficit during the first seven months of 2026, as GDP trade data include services and are measured in real terms, while customs statistics cover nominal merchandise values.
Fiscal policy faces stronger growth
The revised GDP figures come as Serbia moves to increase planned government spending. Parliament approved a revised 2026 budget on Aug. 31, raising revenue and receipts by around RSD 112.5 billion, while expenditure was increased by approximately RSD 171.5 billion. The planned fiscal deficit consequently rises to 3.5% of GDP, from 3% previously.
Serbia’s Fiscal Council has argued that underlying fiscal performance could allow the deficit to finish the year at around 2%-2.5% of GDP without the additional spending measures. The stronger second-quarter performance adds to the fiscal-policy challenge, as the economy is expanding while construction, household consumption and investment are all gaining momentum.
Labour constraints reshape the growth model
The latest figures also highlight structural changes in Serbia’s economy.
Employment is no longer increasing in line with output, while the workforce is ageing. Public investment remains heavily reliant on state spending, and foreign-owned companies account for a significant share of manufacturing exports. At the same time, professional and other services are expanding alongside renewed construction activity. The 5.8% growth in professional, scientific, technical and administrative services demonstrates that the expansion extends beyond traditional manufacturing and infrastructure.
Trade, transport, accommodation and food services also recorded 4.4% growth, reflecting continued activity in consumer-facing and transport-related sectors. With GDP rising 3.8% year on year and 1.5% from the previous quarter, Serbia entered the second half of 2026 with substantially stronger economic momentum than indicated by the first-quarter figures.
