Serbia’s export sector remained resilient in 2025 but lost momentum as external conditions turned less supportive. Slower industrial activity in the European Union, combined with higher input costs and logistical frictions, constrained export volume growth and reduced the sector’s ability to offset rising imports.
Manufacturing exports continued to dominate Serbia’s external earnings, supported by automotive components, machinery, rubber products, and processed metals. However, growth rates moderated compared with the strong post-pandemic rebound. Demand from core EU markets softened as European manufacturers adjusted inventories and postponed investment, directly affecting Serbian suppliers integrated into those value chains.
At the same time, cost pressures remained elevated. Energy costs, while lower than during the 2022 shock, remained volatile and sensitive to geopolitical developments. Imported intermediate inputs faced price variability, squeezing margins for exporters operating on fixed contracts. These pressures limited the ability of firms to compete aggressively on price, particularly in lower-value segments.
Export performance was further complicated by regulatory and trade constraints affecting specific industries, including steel. While these measures did not collapse exports, they capped upside potential at a time when Serbia needed stronger external demand to balance its trade account.
The result was a narrowing of Serbia’s growth drivers. With exports no longer accelerating and investment subdued, the economy relied more heavily on services and consumption. This rebalancing kept GDP growth positive but reduced the economy’s resilience to external shocks, as consumption-led growth tends to be more import-intensive.
Looking ahead, export recovery depends less on Serbia’s internal competitiveness—which remains solid—and more on the trajectory of EU industrial demand. If European manufacturing stabilizes in 2026, Serbia’s exporters are well positioned to respond quickly. If not, the export sector may continue to operate below potential, reinforcing the economy’s moderate-growth ceiling.
