Serbia’s economy grew an estimated 3.6% year-on-year in the first eight months of 2026, according to the latest Macroeconomic Analyses and Trends (MAT) report prepared by the Economics Institute in cooperation with the Serbian Chamber of Commerce. The expansion was driven mainly by services, trade and net taxes, while industrial production showed almost no growth.
Industrial output increased only 0.1% in January–August and fell 0.5% in August, pointing to a significant difference between overall economic activity and the performance of manufacturing and other industrial sectors. At the same time, merchandise exports rose 8.8%, while the export-to-import coverage ratio improved to 82.3%, compared with 79.1% a year earlier.
Services and domestic demand underpin economic activity
The available data indicate that household consumption, services and public expenditure have provided much of the momentum behind Serbia’s economic expansion. Real income growth, access to credit and government spending have supported domestic demand, while trade and other service activities have benefited from that stronger consumption base.
Industrial activity has followed a much weaker path despite continued investment in export-oriented sectors, including automotive manufacturing and metals processing. The difference is partly linked to the concentration of industrial expansion in individual large companies and projects. Electric-vehicle production in Kragujevac has increased substantially, contributing to automotive output and exports, while copper production around Bor continues to represent an important part of Serbia’s industrial and export activity. Stronger performance in selected industries has not produced a broad-based acceleration across manufacturing.
Export gains reflect concentrated industrial activity
The 8.8% increase in merchandise exports provides a positive signal for Serbia’s external sector, particularly amid weak industrial demand in parts of the European Union. The higher export-to-import coverage ratio also indicates an improvement in the balance between merchandise exports and imports.
Export performance, however, can change without a corresponding increase in total industrial output. Product composition, prices, inventories and the performance of a limited number of major manufacturers can all influence export values.
The automotive industry illustrates this pattern, with increased electric-vehicle production contributing significantly to exports without producing an equivalent acceleration across the wider manufacturing sector. Companies supplying European customers in the automotive, construction and industrial sectors continue to operate against uncertain demand conditions. Cost pressures are another factor affecting industrial performance. Serbia’s industrial producer prices rose 9.6% year-on-year in September, with manufacturing prices recording a similar increase. For exporters working under euro-denominated contracts, higher domestic production costs can put pressure on margins when companies are unable to compensate through productivity gains or higher selling prices.
Infrastructure spending remains a major growth driver
Government investment in roads, railways, energy and urban development, including infrastructure associated with Expo 2027, continues to support construction activity, employment and domestic demand. Infrastructure spending can also contribute to longer-term productivity when improved transport, energy and logistics networks reduce operating costs for companies and support private-sector investment.
The economic impact, however, depends on the quality and utilisation of individual projects and on their ability to generate additional private-sector activity. The World Bank projects Serbian GDP growth of 3.1% in 2026 and 3.7% in 2027, reflecting continued expansion alongside uncertainty over external demand and investment conditions. The MAT estimate of 3.6% growth in the first eight months indicates stronger momentum over that period, although it does not represent an official full-year GDP result.
Industrial productivity remains central to longer-term growth
The contrast between consumption and services-led expansion and almost stagnant industrial production is significant for companies, banks and investors assessing Serbia’s growth prospects. Businesses exposed to domestic demand may continue to expand even as manufacturers dependent on European markets face weaker conditions. Longer-term competitiveness will depend on the ability of companies to increase productivity through automation, technology, energy efficiency and higher-value production, while raising industrial output and export competitiveness. The challenge is particularly relevant as Serbia seeks to sustain growth beyond the current cycle of public investment and strengthen the contribution of manufacturing to overall economic expansion.
