Serbian households continued to support economic growth during June, with retail turnover increasing by 6.6 per cent in nominal terms and 4.3 per cent in real terms from a year earlier. Across the first half of 2026, retail sales were 8.7 per cent higher at current prices and 7 per cent higher after adjusting for price changes.
The real increase is the more important measure because it indicates that consumers purchased a larger volume of goods rather than merely paying higher prices. The result confirms that household demand remains one of the strongest components of Serbia’s economy, supported by rising wages, lower headline inflation and continued public-sector and pension expenditure.
Food, beverages and tobacco recorded the strongest first-half increase, with real turnover rising by 6 per cent. Motor-fuel sales increased by 3.9 per cent, while sales of non-food products rose by 2.4 per cent. The concentration of growth in food and essential categories suggests that part of the increase reflects improved purchasing power among households that had previously reduced consumption during the inflation shock.
The June figure nevertheless marks a moderation from the earlier pace. Real retail turnover increased by 6.2 per cent in May and 5.6 per cent in April. During May, sales volumes grew by 7.1 per cent for food, beverages and tobacco, 6.6 per cent for motor fuels and 5 per cent for non-food products. June therefore remained positive but showed a narrowing of the expansion outside essential goods.
Income growth remains the principal support. Average net earnings reached RSD 118,398 in May, increasing by 11.3 per cent nominally and 8.2 per cent in real terms during the first five months. Yet the median salary was only RSD 93,277, meaning that half of employees earned no more than that amount. The gap between the average and median illustrates why strong aggregate retail growth can coexist with continued financial pressure for a large part of the population.
Inflation has become less restrictive at headline level. Annual consumer-price growth slowed to 2.7 per cent in June, from 3.5 per cent in May, partly because food and non-alcoholic beverage prices were lower than a year earlier. Core inflation remained considerably higher, however, at around 4.6 per cent, showing that service prices and other less volatile costs continued to increase more quickly.
This distinction is important for households. Lower food inflation directly improves the purchasing power of lower-income groups, but rent, utilities, transport, healthcare and services can continue to exert pressure even when the overall consumer-price index moderates. In May, housing, water, electricity, gas and related fuel prices were 9.5 per cent higher year on year, while transport prices were up 8.4 per cent and service inflation stood at 5.9 per cent.
Fuel remains a particular vulnerability. Serbia used temporary excise reductions, regulated prices, strategic reserves and export restrictions to limit the pass-through from higher international oil prices. Those measures helped contain inflation but transfer part of the cost from consumers to the state budget and energy-sector balance sheets. The IMF has argued that temporary fuel-excise reductions should be withdrawn to avoid prolonged subsidisation and protect fiscal discipline.
Retail growth is also occurring alongside lower employment in the sector. Registered employment in wholesale and retail trade and motor-vehicle repair declined by 4,276 people in the second quarter compared with the same period of 2025. Larger chains may be gaining market share, improving productivity and expanding digital sales without proportionate workforce growth. Smaller retailers, by contrast, face wage pressure, higher rents and increasing compliance and logistics costs.
For Serbia’s banks and consumer-facing businesses, the first-half data remain supportive. Higher real wages and softer inflation reduce household credit risk and strengthen demand for food, travel, household goods and services. The slower June rate, the weakness of non-food sales and the large difference between average and median earnings counsel against treating consumption as uniformly strong.
The consumer sector is carrying more of the economic expansion than industry or employment. That can sustain GDP growth in the near term, but the purchasing-power improvement ultimately needs to be matched by stronger productivity, private investment and employment. Retail demand is currently firm enough to support the economy, though not yet broad enough to remove the structural constraints facing lower-income households and smaller domestic businesses.
