Serbian companies are facing serious structural problems due to the internal weaknesses of the economy and its high dependence on global trends, according to the latest edition of Biznis i finansije.
Systemic issues have led to excessive reliance on foreign investors, who are now gradually withdrawing as the resources that initially attracted them become depleted. At the same time, domestic private investment is among the lowest in Europe. As a result, Serbia feels the impact immediately when global trade slows, foreign investments fall, or new tariffs are announced.
Serbian businesses generated 866.3 billion dinars in profit in 2024, nine percent less than the previous year. Trade and construction dominated among the top 100 most profitable companies, but these sectors are expected to underperform in 2025. Construction activity is declining sharply nationwide, except in Belgrade, which will limit GDP growth.
Economic and political instability has weakened demand across most sectors, leading to poorer results this year. The annual BIZNIS TOP 2024/25 report ranks the 150 largest Serbian companies by profit and revenue and provides detailed macroeconomic and sectoral analyses.
The report highlights that Serbia uses labor and material resources inefficiently, forcing businesses to work harder for weaker results. Workers in the EU work five hours less per week on average but are 4.2 times more productive. The productivity gap is largest in agriculture (EU is 8.7 times more productive) and smallest in IT (EU still nearly 3 times higher).
Despite this, unit labor costs in Serbia remain unjustifiably high compared to the EU, reducing competitiveness. Business confidence is now at its lowest level since 2020, with the sharpest concerns in trade, industry, and construction.
Although most leading small and medium-sized firms increased revenues in 2023, inflation indicates that this growth largely reflects stagnation rather than expansion.
Similarly, 57% of top entrepreneurs now see the business climate as unfavorable, up from 39% last year.
Three-quarters of Serbian SMEs rely on their own funds, and most generate under USD 1 million in annual revenue. Rising operational and labor costs pose the biggest threat to financial stability. Employers are forced to raise wages due to a shortage of skilled labor, while foreign workers who fill the gap are not cheap, just the only available option.
Serbia loses around 11,000 more people per year than it gains through migration. Migrants and returnees make up 14% of the population; migrants are twice as numerous and significantly younger, and more of them start businesses compared to the domestic population.
Key sectors are also under pressure.
Energy and mining have been unstable for two years, with electricity production in decline due to poor hydrology and reduced activity at the NIS refinery because of U.S. sanctions. However, coal output rose by over 20% in August 2025 thanks to higher lignite production.
The food industry began 2025 with weaker results but may improve modestly by year-end.
The metal and electrical industry, which accounts for almost 46% of Serbia’s exports, is performing worse than last year as orders decline and costs increase. U.S. tariffs and planned new EU safeguards on steel imports threaten Serbia’s position in global supply chains.
The Serbian automotive sector increased revenues from €7.2 billion to €8.3 billion, but 2025 is expected to be weaker due to dependence on the EU car market. Tire producers remain the main contributor to Serbia’s trade surplus in the rubber and plastics sector, though recession in Europe is pushing them to seek new markets.
Although the IT sector is highly productive, Serbia’s dependence on outsourcing foreign clients makes it vulnerable to global fluctuations.
If Serbia developed its own products instead of providing labor for others, the state could earn €1.5–3 billion annually in taxes—up to four times more than the current €800 million IT contribution.
