Serbia’s merchandise trade position improved materially in the first five months of 2026 as export growth outpaced imports and reduced the country’s goods deficit. Total trade reached €32.4 billion, an increase of 3.9% from the corresponding period of 2025.
Exports rose 7.7% to €14.7 billion, while imports increased only 1% to €17.7 billion. The merchandise deficit narrowed 22.9% to €3 billion, compared with €3.8 billion a year earlier. Export coverage of imports improved to 83.1%, one of the strongest recent results.
The improvement is notable because Serbia achieved it against weak demand in its principal European markets. The European Union is expected to grow only 1.1% in 2026, while Germany is projected to expand 0.8%. Serbian exporters therefore increased foreign sales without the support of a strong European industrial cycle.
The longer trend also shows gradual rebalancing. In January-May 2022, exports were €10.9 billion and imports €16.3 billion, leaving a deficit of €5.4 billion. By 2026, exports had increased by approximately €3.8 billion, while imports were only €1.4 billion higher. The deficit had contracted by €2.4 billion over four years.
Serbia’s regional trade position remains particularly strong. The largest bilateral surpluses were recorded with Montenegro, Bosnia and Herzegovina and North Macedonia. These markets absorb pharmaceuticals, bakery products, electrical conductors, vehicles and a broad range of manufactured goods.
Regional surpluses reflect more than proximity. Serbian manufacturers and distributors benefit from established logistics, familiar standards, linguistic links and the scale of the domestic production base. Belgrade also functions as a commercial and financial centre for companies serving the wider Western Balkans.
Electricity, steel products, processed meat and industrial components feature prominently among Serbia’s imports from neighbouring markets. This creates a complementary structure in which Serbia exports higher volumes of diversified manufactured and consumer goods while importing energy and selected industrial inputs.
Surpluses with Germany, the Czech Republic and Slovakia are strategically more significant. These economies sit at the centre of European automotive, machinery and electrical-equipment supply chains. A surplus indicates that Serbian production is not limited to low-value regional trade but has developed a meaningful position within Central European industrial networks.
The sustainability of this position will depend on European production volumes and Serbia’s ability to meet evolving technical, environmental and carbon requirements. Automotive components, electrical conductors, metals, rubber and plastics face growing pressure to document supply-chain emissions, recycled content and product compliance.
The largest deficit remained with China. Serbia imports substantial volumes of consumer goods, electronic equipment, machinery and industrial products from Chinese suppliers. The trade gap is partly the consequence of domestic consumption, but it also reflects the growing role of Chinese equipment in Serbian infrastructure, mining, energy and manufacturing projects.
A deficit driven by consumer imports has a different economic meaning from one driven by capital goods. Imported machinery can raise productivity, expand production and generate future exports. The decisive question is whether projects using Chinese equipment develop Serbian engineering, maintenance, supplier and export capacity or remain dependent on imported technology throughout their operating lives.
The relatively modest 1% import increase may not continue through the second half. Serbia’s public and private investment cycle is accelerating, supported by infrastructure spending, construction and corporate credit. Machinery, electrical equipment, materials and energy imports are likely to rise as projects move into execution.
The National Bank expects net exports to make a negative contribution to full-year GDP growth because imports will increase faster than exports. That projection does not contradict the strong January-May result. It suggests that the first-half improvement may narrow as investment-related imports intensify.
The services balance provides an important offset. Serbia recorded a €923 million services surplus in January-April, supported principally by ICT and professional services. Although the reporting periods differ, the services surplus covered close to one-third of the five-month goods deficit.
This structure is increasingly important for external stability. Merchandise imports allow Serbia to modernise infrastructure and industrial capacity, while services exports generate foreign income without an equivalent requirement for physical inputs. A stronger services surplus can therefore finance part of the capital-goods deficit.
Currency stability has supported trading companies. The average exchange rate in January-June was RSD 117.3938 per euro, limiting volatility for exporters and importers operating mainly in the European market. Foreign-exchange reserves of €29.9 billion provide the NBS with a substantial buffer to preserve orderly market conditions.
A stable dinar reduces balance-sheet risk for euro-linked companies but can also limit price competitiveness when domestic wages rise faster than productivity. Real wages increased 8.6% in January-April, while industrial production grew only 0.6% in January-May. Exporters must therefore raise productivity, automation and product value to absorb labour-cost increases.
Energy prices present another risk. Brent and WTI oil prices were up more than 18% from the start of the year by July, while coal increased 21.9%. Higher transport, insurance and electricity costs can weaken export margins even when order volumes remain stable.
Carbon exposure is becoming equally relevant. Serbian exporters to the EU increasingly need plant-level emissions data, credible electricity documentation and auditable production records. Companies able to demonstrate lower embedded emissions may preserve market access and secure stronger commercial terms; those relying on broad national averages face greater compliance and pricing uncertainty.
The reduced trade deficit strengthens Serbia’s external position at a time when net FDI remains below earlier levels. Exports of €14.7 billion, import coverage of 83.1% and strong regional surpluses show a more resilient trading economy. The second-half test will come as domestic investment demand raises imports and weak European growth continues to constrain the external market.
