Weaker prospects for global economic growth, combined with ongoing domestic political uncertainty, are posing significant challenges for Serbia’s economic performance, Fitch Ratings stated in its latest report. Despite these headwinds, the agency expects that Serbia will maintain its BB+ credit rating—held since September 2019—through the continued implementation of a mix of economic measures.
“Fitch already revised its 2025 real GDP growth forecast for Serbia down to 3.8% in March from 4.2% in its previous rating review in January, due to worsening external conditions,” the agency said. “If confirmed, the Q1 2025 GDP estimate would indicate further downside risks to our outlook amid the escalation of a global trade war, which significantly undermines the economic prospects of the Eurozone.”
A preliminary estimate by Serbia’s Statistical Office showed GDP growth of only 2% in the first quarter of 2025, highlighting a notable economic slowdown, Fitch noted. The agency pointed to a slowdown in industrial production, stabilization in retail trade, and weakening business sentiment—especially in the services sector—as key signs of economic deceleration this year.
The agency also stated that the breakdown of GDP contributors in Q1, expected to be released in early June, should clarify to what extent current high-frequency data trends reflect domestic versus global factors.
High-frequency indicators are economic data published frequently—monthly or even weekly—offering more timely insight into current economic conditions.
Fitch noted that Serbia’s external buffers remain strong, with international reserves totaling €31.6 billion. However, reserves declined by €894 million in Q1 2025, largely due to the National Bank of Serbia’s net foreign exchange sales of €955 million amid increased demand for foreign currencies. This demand stemmed from a combination of domestic and external uncertainties, as well as seasonal pressures on the dinar.
While acknowledging that protests in Serbia have lasted longer and are more widespread than previous anti-government demonstrations, Fitch emphasized that they are still primarily student-led. The protests focus on concerns over perceived centralization of power and corruption, rather than economic policy, which currently makes any significant political change unlikely.
Fitch also noted that the next scheduled parliamentary and presidential elections are set for 2027, although snap elections remain a possibility. President Aleksandar Vučić has recently hinted that elections might be moved up to 2026.
