Serbia’s merchandise trade deficit declined 12.6% in the first seven months of 2026, as export growth significantly exceeded the pace of import expansion and strengthened the country’s external goods balance. Total merchandise trade reached €46.60 billion from January through July, representing a 6.3% year-on-year increase, according to data from the Statistical Office.
Exports rose 8.8% to €21.09 billion, while imports increased 4.4% to €25.50 billion. As a result, the merchandise deficit fell to €4.41 billion, compared with slightly more than €5 billion in the same period of 2025. Export coverage of imports improved to 82.7%, from 79.4% a year earlier. In dollar terms, Serbia’s foreign trade reached $54.17 billion, up 12.1% year on year. Exports increased 14.6% to $24.52 billion, while imports climbed 10.1% to $29.65 billion, reducing the dollar-denominated deficit by 7.6% to $5.13 billion.
Export Growth Outpaces Import Demand
The widening difference between export and import growth was the main feature of the January-July trade results. Euro-denominated exports expanded at exactly twice the rate of imports, with gains of 8.8% and 4.4%, respectively. The result contrasts with periods in which strong investment and household demand pushed up imports and contributed to a wider merchandise deficit. Serbia recorded mixed industrial results during the summer. Industrial production contracted 2.3% year on year in July, while manufacturing output fell 1.6% and electricity, gas and steam production declined 8.8%. Despite those movements, cumulative exports continued to increase at a strong pace.
The economy grew 3.8% year on year in the second quarter, compared with 3.2% in the first quarter, with construction, household consumption and services among the main contributors to growth. The combination of stronger exports and domestic demand has so far limited the increase in imports typically associated with faster economic activity, including imports of consumer goods, machinery, energy and industrial inputs.
EU Accounts for 58.6% of Merchandise Trade
The European Union represented 58.6% of Serbia’s total merchandise trade during the first seven months, preserving its position as the country’s largest trading bloc. Serbian manufacturing and supply chains remain closely connected to the EU economy despite efforts to expand trade with China, Turkey, the Middle East and other markets. Germany, Italy and other EU economies are significant destinations for Serbian automotive components, electrical equipment, machinery, metals and agricultural products. The EU is also a major source of machinery, industrial inputs and consumer goods imported into Serbia.
The importance of European markets leaves Serbian exporters closely exposed to economic conditions in Germany and Central Europe. Foreign direct investment over the past decade has expanded export-oriented manufacturing, with factories integrated into European automotive, electrical-equipment, machinery and wider industrial supply chains. Those operations have increased exports while also generating imports of components and intermediate goods. The latest trade data indicate that export growth from manufacturing, agriculture and other sectors has so far been sufficient to improve the overall balance.
CEFTA Generates €1.91 Billion Surplus
Trade with Central European Free Trade Agreement (CEFTA) partners continued to produce a substantial surplus for Serbia. Serbian exports to CEFTA countries amounted to €2.82 billion in January-July, while imports stood at €908.8 million. The resulting surplus reached €1.91 billion, with exports covering more than 310% of imports. The surplus was supported by exports of cereals and cereal products, beverages, road vehicles, pharmaceuticals, electrical machinery and equipment.
Neighbouring CEFTA markets remain significant for Serbian companies because of their geographical proximity and established distribution networks. Trade with the region also offsets deficits recorded with larger economies where Serbia imports substantial quantities of energy, machinery and industrial goods. Serbia exported more than three euros of goods to CEFTA markets for every euro imported during the period.
July Merchandise Trade Reaches About €6.95 Billion
The monthly figures show that trading activity remained substantial in July. Total merchandise trade increased from €39.65 billion at the end of June to €46.60 billion at the end of July, indicating approximately €6.95 billion of trade during July alone. Exports were approximately €3.12 billion, while imports reached around €3.82 billion, leaving a monthly merchandise deficit of roughly €701 million.
The July figures came despite weaker aggregate industrial-production data and highlight the difference between industrial output measured during a month and merchandise exports recorded during the same period. Export shipments can include agricultural commodities, inventories, goods produced earlier and output from individual industries whose performance differs from the overall industrial index. Motor vehicle production, for example, increased strongly in July even as manufacturing output overall declined.
Stronger Trade Balance Amid Faster Economic Growth
The improvement in the goods balance comes as Serbia’s economic growth accelerated to 3.8% in the second quarter from 3.2% in the first quarter. Household consumption, construction and retail activity remained strong during the period. Stronger domestic activity would normally increase demand for imported products and industrial inputs. During the first seven months, however, export growth was considerably faster than import growth.
A sustained improvement in merchandise trade could reduce the pressure from net trade on economic growth and lower Serbia’s external financing requirements. The merchandise balance is one element of the wider current account, which also includes services, investment income and transfers. Serbia’s services exports, particularly in information technology, transport and business services, provide additional support for the broader external position, while foreign direct investment has historically helped finance the current-account gap.
Export Composition Remains Important
The improvement in gross export figures also highlights the importance of domestic value added. A significant share of Serbia’s manufacturing expansion has been driven by foreign-owned companies operating within international supply chains. Such businesses generate substantial exports but can also import machinery, components and raw materials. The domestic economic impact therefore depends partly on how much of the production process is sourced within Serbia.
Serbia has sought to develop higher-value activities through investment in electric vehicles, batteries, electronics, advanced manufacturing and information technology. Chinese industrial investment has also contributed to changes in the geographical and sectoral composition of trade, including in mining, metals and automotive manufacturing. At the same time, the EU remains the dominant commercial partner and the principal external market for Serbian industrial exports, leaving the country exposed to economic conditions in Germany and other major European economies, particularly through automotive and industrial supply chains.
For January-July 2026, Serbia recorded €21.09 billion in exports, up 8.8%, while imports reached €25.50 billion, up 4.4%. The resulting €4.41 billion trade deficit was 12.6% lower than a year earlier, while import coverage increased to 82.7%. Trade with CEFTA economies generated a separate €1.91 billion surplus, providing a significant positive contribution to Serbia’s overall merchandise balance.
