Serbia’s Trade Deficit Falls 12.6% as Exports Gain Pace in Seven Months

Serbia recorded stronger merchandise export growth than import growth in the first seven months of 2026, narrowing its trade deficit by 12.6% even as domestic economic activity accelerated.

Exports reached €21.09 billion from January through July, an 8.8% year-on-year increase, according to Statistical Office data. Imports rose 4.4% to €25.50 billion, while total merchandise trade increased 6.3% to €46.60 billion. The merchandise trade deficit declined to €4.41 billion, while export coverage of imports improved to 82.7%, compared with 79.4% a year earlier. The improvement came alongside stronger domestic demand. Serbia’s GDP expanded 3.8% year on year in the second quarter, with household consumption increasing 4% and fixed investment rising 3.3%.

EU trade remains central to Serbia’s export economy

EU member states represented 58.6% of Serbia’s total merchandise trade during the first seven months, maintaining the bloc’s dominant position in the country’s external commerce. Serbian companies benefit from geographical proximity, trade arrangements and established integration with German, Italian and Central European supply chains. At the same time, the country’s exposure to European industrial demand leaves exporters sensitive to changes in manufacturing conditions across the bloc. The automotive industry is particularly important. Serbia employs approximately 100,000 people in automotive-component manufacturing, while the state has allocated around €652 million in incentives to the sector since 2016.

CEFTA trade produces a substantial surplus

Regional commerce continues to generate a significant positive contribution to Serbia’s external balance. The country recorded a surplus of approximately €1.91 billion with CEFTA economies in the first seven months of 2026. Serbian exports to neighbouring markets include cereals, beverages, vehicles, pharmaceuticals and electrical equipment.

Trade with CEFTA economies provides an important counterbalance to Serbia’s structurally more import-intensive trade with the EU and larger industrial economies.

Investment and energy shape the external balance

The reduction in the merchandise deficit is taking place while Serbia maintains a large investment programme spanning infrastructure, industry, renewable energy and EXPO-related development. Such projects require imported machinery, equipment and materials, making export performance important for limiting pressure on the external balance.

Energy is another major factor. Serbia relies on imported crude oil and gas and can become a significant electricity importer when hydropower production declines or coal-based generation is constrained. Low Danube water levels during summer 2026 complicated petroleum-product imports, while uncertainty surrounding NIS highlighted the strategic exposure associated with Serbia’s only refinery.

Export structure increasingly includes advanced industry

Serbia’s export base covers electrical equipment, automotive components, metals, mining, machinery, agricultural products, rubber and tyres. A significant proportion of exports is generated by a relatively limited number of large foreign-owned companies. Chinese investors are becoming increasingly prominent in automotive components, batteries, robotics, mining and advanced manufacturing.

Reliance Batteries is preparing a €100.5 million plant in Inđija, while Minth has opened a humanoid-robot production operation in Šabac and is planning a larger robotics platform. The expansion of these activities could add batteries, electronics and robotic systems to Serbia’s industrial export base, while the degree of local production and sourcing will determine how much value is retained domestically. Mining is also an important source of exports. Copper and gold production around Bor has expanded following major investment by China’s Zijin, providing foreign-currency earnings and further diversifying Serbia’s export structure.

Export growth comes despite a stable dinar

Serbia has maintained a highly stable dinar against the euro, supporting business planning and limiting foreign-exchange exposure. The currency environment also means exporters cannot depend on depreciation to offset higher labour costs. The 8.8% increase in exports has therefore occurred alongside strong wage growth, placing greater emphasis on productivity, investment and automation.

Capital goods remain important to import demand

The slower increase in imports has helped narrow the trade deficit, but import composition remains important for Serbia’s industrial development. Machinery and technology imports can support future production and exports, while energy infrastructure requires imported turbines, electrical equipment and specialist technology. The strongest improvement in the trade balance would therefore combine continued imports of productive capital goods with slower growth in consumer and energy imports.

Export coverage improves as GDP accelerates

The increase in import coverage to 82.7% represents a further improvement in Serbia’s merchandise trade position. The country continues to record a goods deficit, but the gap has become smaller relative to export earnings. Services exports, including IT and professional services, also contribute to Serbia’s overall external position, meaning merchandise trade alone does not determine the country’s broader external balance.

The latest figures nevertheless show that merchandise exports are expanding faster than imports at a time when domestic economic activity is strengthening.

Fiscal expansion could influence future import demand

The trade data were released alongside stronger second-quarter economic figures, with GDP growth revised to 3.8% and construction, household consumption and investment all recording increases. Parliament has also approved a revised 2026 budget that raises planned expenditure by approximately RSD 171.5 billion and increases the targeted fiscal deficit to 3.5% of GDP. Additional domestic demand generated by fiscal measures could affect import growth during the remainder of the year, particularly as infrastructure and other investment projects continue.

Domestic suppliers remain a key part of export development

Serbia’s export performance remains closely linked to foreign investment, while locally owned companies face challenges involving scale, financing, certification and technology. Financing programmes from the EIB and EBRD aimed at machinery, green investment and SME productivity could support the expansion of domestic suppliers.

A broader base of Serbian-owned exporters would increase the number of companies participating in international supply chains and could retain a larger share of export-related earnings within the domestic economy. The first seven months of 2026 showed exports rising 8.8%, compared with 4.4% growth in imports, while the merchandise deficit fell 12.6% and export coverage reached 82.7%.