transition economy

Serbia’s Banking Sector Faces Selective Credit Cycle Amid External Risks

Serbia’s banking sector in 2026 demonstrates a foundation of stability, characterized by a significant reduction in non-performing loans to 2.05%, controlled inflation at approximately 2.8%, and robust foreign exchange reserves totaling €29.5 billion. This scenario paints an image of resilience for a transition economy; however, a noteworthy structural shift is taking place within the credit landscape. The current environment indicates that credit expansion is becoming increasingly selective rather than broad-based, reflecting a recalibration of risk across the Serbian economy. The…