Serbia’s external position improved substantially during the first five months of 2026. The current-account deficit narrowed to €560.6 million, approximately €1.2 billion less than in the corresponding period of 2025. The improvement was driven primarily by exports of goods and services, which increased by 7.3%, while imports grew by only 2.3%.
Goods exports rose by 8% during the period, supported by an 8.6% increase in manufacturing exports. Motor-vehicle exports were particularly strong, increasing by 50.8%. Service exports grew by 5.7%, with transport, information and communications technology, and business services providing the main impetus.
Import growth was more restrained. Goods imports increased by 2.7%, led mainly by intermediate inputs, while service-import growth slowed to 1.1%. Other parts of the current account also improved: the secondary-income surplus increased by €305 million, and the primary-income deficit was €26.4 million smaller than a year earlier.
Foreign direct investment continued to provide relatively stable financing. Gross FDI inflows reached €893 million in January–May, while net inflows amounted to €596 million. Net FDI therefore fully covered the current-account deficit recorded during the period.
The quality of earlier investment is also relevant. Between 2018 and 2025, Serbia received €28.4 billion in FDI, almost 60% of which was directed toward tradable sectors. Approximately €8.4 billion went into manufacturing, while investment in scientific, technical and innovation-related activities gained importance. Such investment can strengthen external sustainability by expanding export capacity rather than merely financing domestic consumption or property development.
Despite the favorable start to the year, the external accounts are not free of pressure. The NBS’s May forecast envisaged a full-year current-account deficit of about 6% of GDP. Domestic consumption, infrastructure construction and higher energy costs are expected to produce faster import growth during the remainder of 2026. The better-than-expected year-to-date result means the annual deficit may be smaller than forecast, but it is too early to treat the first five months as representative of the entire year.
For 2027, the deficit is projected to decline to 4% of GDP, largely because Expo is expected to increase tourism and other service exports. That improvement will depend on visitor spending and service-sector capacity rather than on the event alone.
The external picture is therefore encouraging but conditional. Export capacity is expanding, FDI coverage is favorable and the trade gap has narrowed. The remaining challenge is to preserve that improvement once investment-related and energy imports accelerate.
