Serbia’s average net wage climbed to RSD 120,102, or about €1,023, in April-May 2026, while the number of formally employed workers declined, creating a widening contrast between household incomes and employment. Nominal wages increased 10.7% year on year, while real wages rose 7.0%. The median net wage advanced 11.6% to RSD 93,931.
At the same time, formal employment fell by approximately 14,000 workers year on year, leaving 2.36 million people formally employed in the second quarter. Employment declined 0.6% year on year, following a 0.4% contraction in Q1.
Productivity growth supports higher wages
The National Bank of Serbia estimates that economy-wide productivity increased 4.2% year on year in Q2. Wages are still increasing faster than productivity, but the difference has narrowed. The NBS expects wage growth to move closer to productivity growth during 2027, which would gradually reduce pressure from domestic labour costs on inflation.
The total nominal net wage bill increased 9.8% year on year in the period, with the entire increase attributable to higher wages rather than an expansion in employment. This means that the income available to households continued to increase even as the number of formal jobs declined.
Wage growth remains broad across sectors
More than half of Serbia’s economic activities recorded double-digit wage growth in April-May. Education posted a 19.6% increase, followed by accommodation and food services at 13.1% and healthcare at 13.0%. Public-sector wages increased 11.8%, compared with 10.2% in the private sector.
Private-sector employment averaged 1.74 million in Q2, down 0.8% year on year. Public-sector employment declined by only 0.1%. Lower employment in public administration was partly offset by increases in education and healthcare. Manufacturing and trade recorded some of the largest employment declines, while administrative, professional, scientific, innovation and technical services increased their headcounts.
Registered unemployment reaches a record low
Despite the fall in formal employment, registered unemployment continued to decline. The National Employment Service recorded 333,804 unemployed people in June, almost 11,000 fewer than a year earlier and the lowest number on record.
The Labour Force Survey placed Serbia’s unemployment rate at 8.9%, down 0.2 percentage points year on year. The simultaneous decline in employment and unemployment reflects weaker labour-force participation. The participation rate among the working-age population stood at 72.9%, while the overall activity rate was 55.7%, with both measures below their levels a year earlier. These changes affect the available labour supply as Serbia enters a period of stronger investment and infrastructure activity.
Investment and automotive output reshape labour demand
Construction, services and infrastructure-related activities are expected to face stronger labour demand as the Expo investment cycle accelerates. Manufacturing employment, however, has been declining despite stronger output in several industrial branches. The combination of higher production and fewer workers is consistent with rising productivity and more capital-intensive investment. The automotive industry provides a notable example. Motor-vehicle production increased 43.3% year on year in Q2, driven by faster electric-vehicle production in Kragujevac, while the wider manufacturing employment figures did not record a corresponding increase.
Wage growth remains relevant for inflation
Labour costs remain important for monetary policy because service prices continue to rise rapidly. Service inflation stood at 6.6% year on year in June, with services accounting for approximately four-fifths of core inflation. The NBS expects wage growth to become a gradually smaller source of inflationary pressure rather than adjusting sharply.
Higher earnings continue to support household consumption alongside pensions, remittances and consumer borrowing. Household lending was growing 20% year on year in June, adding to the spending capacity generated by rising wages. At the same time, lower food prices have helped contain headline inflation, creating a contrast between relatively subdued overall price growth and persistent pressure in services.
Household purchasing power reaches record coverage levels
The improvement in real incomes is also reflected in the relationship between wages and household consumption costs. The average wage covered 109.1% of the average consumer basket during the first four months of 2026, a record level according to the NBS.
The minimum wage covered 113.0% of the minimum consumer basket, also reaching a record high. The labour-market data therefore combine a 7.0% increase in real wages with a 0.6% decline in formal employment, while productivity increased 4.2% in the second quarter. As Serbia’s infrastructure and services investment cycle approaches 2027, the relationship between wage growth, productivity, labour participation and employment is becoming increasingly important for the expansion of household incomes and the availability of workers.
