Experts from the U.S. credit rating agency Fitch Ratings hope Serbia will maintain its BB+ investment-grade rating, first awarded in October last year, but warn that the Serbian economy faces increasing challenges. According to Fitch’s latest flash assessment published on May 6, 2025, Serbia’s economic growth in Q1 slowed due to global geopolitical pressures and domestic political uncertainty.
Fitch highlights weaker global growth prospects and ongoing political instability in Serbia as obstacles, though it expects Serbia to continue policies that preserve improvements in its credit rating with a positive outlook.
Fitch lowered Serbia’s 2025 GDP growth forecast in March from 4.2% to 3.8%, citing worsening external conditions and escalating global trade tensions, which also dampen Eurozone economic prospects.
In Q1 2025, Serbia’s GDP grew by only 2% year-on-year, reflecting slower industrial production, stagnant retail sales, and weakening business confidence, especially in services.
Despite strong foreign exchange reserves of €31.6 billion, these dropped by €894 million in Q1 due to increased demand for foreign currency amid domestic and external uncertainties and seasonal pressures on the Serbian dinar.
Trade also contributed to slower growth, with exports down 1.6% in USD terms and imports up 8.7% in the same period.
Domestically, Serbia’s political situation remains unsettled. The Serbian parliament approved Đuro Macut as prime minister on April 16, succeeding Miloš Vučević, who resigned in January following widespread protests triggered by a deadly railway station collapse in Novi Sad.
The protests, led mainly by students and focusing on perceived centralization and corruption rather than economic policy, are unlikely to cause major political shifts in the near term.
Fitch notes the next parliamentary and presidential elections are scheduled for 2027 but does not rule out early elections, especially as President Aleksandar Vučić recently hinted elections could be moved to 2026.
The new government, led by Macut, a political newcomer, signals policy continuity, especially in macroeconomic management, with several key ministers reappointed.
Fitch emphasizes that the current political situation is expected to have limited impact on economic policy, which remains focused on prudent fiscal management, investment-driven growth, strengthening reserves, and rising GDP per capita.
Serbia has achieved nearly 80% growth in GDP per capita in USD terms from 2018 to 2024, reflecting solid economic progress.
Overall, Fitch’s latest assessment sends a cautiously optimistic message, encouraging Serbia to maintain its economic reforms amid ongoing domestic and global challenges.
