The European Bank for Reconstruction and Development (EBRD) has warned that risks to Serbia’s economic growth stem from ongoing domestic political tensions and potential disruptions in global trade, which could limit exports, reduce inflows of foreign direct investment, and slow down structural reforms.
According to the newly released report “Regional Economic Prospects – Under Pressure,” Serbia is expected to record real GDP growth of 2.5 percent this year, with growth accelerating to 3.3 percent in 2026, supported by investments related to the EXPO exhibition.
The EBRD notes that Serbia’s economic growth slowed to 2 percent year-on-year in the first half of 2025, following two years of strong expansion.
Growth drivers included information and communication services and the manufacturing sector, supported by the launch of serial production of electric vehicles and higher tire production, while construction had a negative impact.
The report further states that social unrest weighed on trade, hospitality, and related industries, while government and household consumption continued to rise. Investments declined and net exports remained negative.
The European lender also points out that the current account deficit doubled in the first half of the year and inflation remained high at 4.9 percent in July.
At the same time, government spending increased at a faster pace due to higher wages and larger social transfers, resulting in a small budget deficit in the January–July period.
In the section dedicated to Serbia, the report adds that stronger exports from the auto industry and accelerated infrastructure investment could boost growth in the second half of the year.
For the Western Balkans, the EBRD forecasts average growth of 2.7 percent this year and 3.2 percent next year.
The report highlights that continued global uncertainty and weak demand from the EU will remain a drag on exports, trade, investment, and remittances in the region, especially in export-oriented economies such as Serbia, Bosnia and Herzegovina, and North Macedonia.
It also notes that tourism-dependent economies such as Kosovo, Albania, and Montenegro are affected by increased uncertainty in EU economies.
For the Western Balkans, the EBRD stresses that structural reforms and progress toward EU integration could significantly stimulate economic growth.
Albania’s GDP is projected to grow by 3.5 percent in both 2025 and 2026, Bosnia and Herzegovina by 2.2 and 2.7 percent, Montenegro by 2.6 percent this year and 2.7 percent next year, and North Macedonia by 3 percent in both years.
Across the broader EBRD region, growth is expected at 3.1 percent in 2025 and 3.3 percent in 2026.
