Serbia’s merchandise trade deficit fell 10.9% to €5.66 billion in the first nine months of 2026, as exports increased faster than imports. Modest industrial growth and declining energy-sector output highlight uneven economic performance.
According to the Statistical Office of the Republic of Serbia, exports rose 8.9% to €26.89 billion, while imports increased 4.9% to €32.56 billion. Export coverage of imports improved to 82.6%, compared with 79.6% a year earlier. Despite stronger external trade, industrial production grew by only 0.5%. Manufacturing output increased 1.5%, while electricity, gas, steam and air-conditioning supply contracted 4.6%.
Automotive and equipment manufacturing drive growth
The automotive industry recorded the strongest expansion, with production of motor vehicles, trailers and semi-trailers rising 40.4% year-on-year. September output in the sector increased 37.3%.
Serbia’s integration into European automotive supply chains, including electric and hybrid vehicle production and component manufacturing, supports exports and demand for engineering, logistics and specialised labour. Manufacturers’ reliance on imported components, technology and equipment means that higher gross exports do not automatically translate into equivalent domestic value added.
Other growing industries included electrical equipment, where production increased 11.3%, and machinery and equipment, which expanded 12.5%. These sectors serve export markets and supply products for manufacturing, infrastructure and energy systems. Their longer-term contribution will depend on investment in domestic engineering, technology and supplier networks, as well as demand from European industrial customers.
Traditional manufacturing remains under pressure
Several established industrial branches recorded significant declines. Basic metals production fell 14.3%, fabricated metal products decreased 9.9%, textiles declined 5.5%, wearing apparel dropped 12.3%, and leather-related manufacturing contracted 8.7%.
Metal producers face exposure to commodity prices, energy costs and European industrial demand, while textile and apparel manufacturers contend with lower-cost competitors and rising labour expenses. The uneven performance also creates employment challenges, as expanding capital-intensive industries cannot necessarily absorb workers displaced from traditional manufacturing.
Energy output remains a key vulnerability
Production in electricity, gas, steam and air-conditioning supply declined 4.6%, including a 7.2% contraction in September.
The industrial production index covers the wider energy-supply category and is not a direct measure of electricity generation. Assessing the impact on imports requires separate data on generation, consumption, hydrological conditions, plant availability and cross-border electricity flows. Nevertheless, weaker domestic energy-sector output can increase exposure to regional electricity markets. Higher import prices can raise industrial costs and undermine the competitiveness of manufacturers, particularly energy-intensive businesses.
EU dominates trade, while CEFTA generates a surplus
The European Union accounted for 58.1% of Serbia’s merchandise trade during the first nine months, underlining the importance of European demand for automotive production, electrical equipment, metals and industrial components.
Serbia recorded a stronger position in regional markets. Exports to CEFTA countries reached approximately €3.69 billion, against imports of €1.17 billion, producing a trade surplus of €2.53 billion. Export coverage of imports in the region reached almost 317%.
Regional markets support Serbian agriculture, food processing, pharmaceuticals, vehicles and electrical equipment, as well as logistics and distribution networks. However, the surplus does not offset the wider deficit, which remains influenced by imports of industrial equipment, raw materials, consumer goods and energy.
Export growth does not guarantee broader industrial recovery
The increase in export values and limited industrial production growth reflect different measurements. Trade statistics record the monetary value of goods sold abroad, while industrial indices measure changes in production volumes. Prices, product composition and inventory sales can therefore influence exports without corresponding increases in domestic output.
Serbia’s improved trade balance demonstrates stronger performance in selected export industries, but does not establish an equivalent improvement in overall productivity or domestic value creation.
Maintaining export momentum will require stronger local supplier networks, investment in industrial technology, technical skills and more reliable energy infrastructure. The outlook for 2027 will depend on automotive and equipment exports, the stabilisation of traditional manufacturing and improvements in domestic energy-sector performance.
