Erste Group has revised Serbia’s 2025 GDP growth forecast to 3.8%, down by 0.7 percentage points, citing a potential slowdown in public investment due to the collapse of the Serbian government and escalating global geopolitical tensions. For 2024, Serbia’s GDP growth remains solid at 3.9%, primarily driven by domestic demand.
Inflation has stabilized at the upper limit of the National Bank of Serbia’s target range, expected to fall below 4% in the second half of 2025. However, the NBS is cautious, with expected interest rate cuts postponed until May, with a total of three 25-basis-point reductions forecasted for 2025. Inflation risks remain, mainly due to global geopolitical uncertainties, including the global trade war and oil price increases.
Private consumption continues to support growth but is expected to decelerate due to high inflation and political uncertainty. Protests and the government’s resignation have further impacted investor confidence and investment performance. The forecast for exports remains modest, with the services sector performing better.
Serbia’s dinar has remained stable in relation to the euro, with NBS interventions maintaining stability. The central bank is expected to continue controlling the exchange rate throughout 2025.
Erste analysts expect a reduction in the NBS’s interest rate in 2025, with a total of 75 basis points in cuts, down from their previous forecast of 100 basis points.
