Serbia’s first-half budget execution reveals a widening gap between projects receiving rapid funding and those remaining largely dormant. Defence procurement, EXPO-related construction and selected Belgrade transport schemes absorbed tens of billions of dinars by the end of June, while important wastewater, healthcare, flood-protection and energy-efficiency programmes recorded limited or no expenditure.
The execution figures cover the period from January 1 to June 30, 2026, against an annual state budget providing revenues of approximately RSD 2.415 trillion, expenditure of RSD 2.752 trillion and a planned deficit of RSD 337 billion, equivalent to around 3 per cent of GDP. Total capital expenditure was budgeted at roughly RSD 602 billion.
The largest identified first-half disbursement was linked to the Serbian Armed Forces’ acquisition of Dassault Aviation Rafale combat aircraft. The state allocated RSD 90 billion for the programme in 2026 and spent RSD 58.7 billion, or 65.2 per cent, during the first six months. At approximately €500 million, the payment alone was larger than the combined first-half execution of several major civilian infrastructure programmes.
A further RSD 4.4 billion was spent on weapons and military equipment under a tripartite agreement, representing 63.3 per cent of the programme’s annual allocation of RSD 6.96 billion.
The speed of defence execution contrasts with spending on military infrastructure. Construction of the new Ministry of Defence and General Staff buildings received RSD 746.8 million, or only 9.8 per cent of the RSD 7.65 billion annual allocation. No expenditure was recorded for planned infrastructure for the land forces, air force and air defence, or for military facilities in Priboj, Niš and Pančevo.
Funding connected with the proposed return of compulsory military service also moved more slowly. The original RSD 6.36 billion allocation was reduced to RSD 4 billion, of which RSD 1.64 billion, or 41 per cent, had been spent by the end of June.
The figures show a defence budget divided between rapidly executed procurement commitments and slower domestic construction. Aircraft and equipment contracts require scheduled payments that can create large cash outflows early in the year, while buildings and infrastructure depend on design, permitting, procurement and construction progress. The difference still matters for fiscal flexibility because foreign-equipment payments leave less room to defer expenditure when revenues weaken.
EXPO 2027 formed the second major spending concentration. Serbia’s government has positioned the specialised exhibition in Surčin as the centre of a wider development programme involving exhibition facilities, roads, utilities, rail infrastructure, accommodation and the National Stadium.
The fastest-executing EXPO item was the design and construction of buildings in zones B and E. Almost the entire RSD 12.9 billion annual budget had been used by June, with expenditure reaching RSD 12.84 billion.
The central EXPO Belgrade 2027 item, financing construction within the Surčin complex, recorded spending of RSD 10.17 billion from an annual allocation of RSD 42.57 billion. The execution rate was 23.9 per cent, leaving more than RSD 32 billion to be spent or carried forward during the second half and subsequent budget periods.
Planned spending on EXPO-related linear infrastructure was increased during the year from RSD 18.6 billion to RSD 28.7 billion. This category covers roads, stormwater drainage, gas and electricity installations and heat-supply infrastructure. First-half expenditure reached RSD 8.37 billion, or 29.1 per cent of the revised allocation.
An additional RSD 805 million was spent on support for EXPO implementation, including approximately RSD 503 million in subsidies to public non-financial enterprises and organisations and RSD 302 million for domestic non-financial assets and additional investment.
Transport access to the complex is becoming a significant budget category of its own. The railway between Zemun Polje and the National Stadium received RSD 10.14 billion during the first half, equal to 59.6 per cent of its RSD 17 billion annual allocation.
EXPO road infrastructure absorbed a further RSD 2.9 billion from a planned RSD 7 billion. The National Football Stadium received RSD 5.28 billion, or 24.9 per cent, from its annual allocation of RSD 21.2 billion.
Across these separately reported items, expenditure associated with the EXPO area, National Stadium and connecting infrastructure already exceeded RSD 50 billion in the first half. The amount illustrates how the exhibition has evolved from a single event project into one of Serbia’s largest integrated public-investment programmes.
The fiscal question is not limited to the construction cost. Exhibition buildings, stadiums, railways, roads, utilities and supporting facilities will create operating and maintenance obligations after completion. Their financial value will depend on post-2027 utilisation, commercial revenues, urban development around Surčin and the ability of public operators to prevent new assets from becoming a permanent budget burden.
The Belgrade metro was another rapidly funded programme. Of the RSD 26 billion budgeted for 2026, RSD 13.9 billion, or 53.6 per cent, had been spent by the end of June. Around RSD 11.9 billion was classified as expenditure on machinery and equipment, RSD 1.23 billion as transfers to the City of Belgrade and RSD 826.5 million as spending on buildings and structures.
The concentration on equipment suggests that contract-payment schedules rather than visible construction progress are driving much of the budget execution. This distinction is relevant for evaluating whether financial expenditure is translating into certified physical progress and whether imported equipment is arriving in line with civil works, systems integration and commissioning requirements.
The new bridge over the Sava received RSD 1.54 billion, or 31.9 per cent of its RSD 4.8 billion annual allocation. By contrast, no expenditure was recorded for the central Belgrade wastewater collection and treatment system despite an initial RSD 2 billion allocation.
The contrast captures a recurring feature of Serbian public investment: transport megaprojects often move faster than environmental and municipal infrastructure. A bridge or railway has a visible construction profile, while wastewater systems require complex land, network, permitting, utility and municipal coordination. Yet delayed wastewater investment carries direct environmental and EU-alignment costs, particularly for a capital that still lacks a comprehensive treatment system.
Rail procurement and corridor spending were similarly uneven. No money was spent during the first half on the planned acquisition of five electric trains capable of 200 kilometres per hour, despite an annual allocation of RSD 4.35 billion.
Only RSD 497.7 million, or 4.2 per cent, was spent from the RSD 11.76 billion allocation for the Hungarian-Serbian railway project. The low rate may reflect contract timing or the completion profile of individual sections, but it leaves a substantial amount scheduled for the second half.
The Novi Sad-Ruma expressway received RSD 7.3 billion, close to half of its annual allocation. Spending on the Ruma-Šabac-Loznica corridor reached RSD 1 billion, equal to 19.2 per cent of the planned RSD 5.25 billion.
The state also spent RSD 315 million on removing the sunken German Second World War fleet from the Danube, against an annual budget of RSD 699 million. Although small beside the metro or EXPO, the programme is relevant to navigation safety, river capacity and logistics along the Danube corridor.
Several high-profile projects had no recorded expenditure. The planned tunnel between Karađorđeva Street and the Danube slope, with RSD 5 billion budgeted for 2026, remained financially inactive. The proposed aquarium at Ušće and the new Natural History Museum building, allocated RSD 2.89 billion, also recorded no first-half spending.
Zero execution at midyear does not necessarily mean cancellation. Large projects often spend slowly during design and procurement before accelerating once contracts become effective. It nevertheless creates a risk of heavy second-half expenditure, delayed implementation or repeated transfer of allocations into later budgets.
Flood protection and water-management spending remained modest. The Ministry of Agriculture planned RSD 8 billion for river regulation and protection from damaging water events, but had spent only about RSD 1 billion, or 13.7 per cent, by June. No expenditure was recorded for the Svračkovo dam, despite an annual republican-budget allocation of RSD 701.2 million.
Environmental programmes were smaller and more decentralised. Subsidies for environmentally friendly vehicles reached RSD 231.9 million, directed to private companies. Local governments received RSD 490.8 million for water-resource protection and RSD 349.9 million for the purchase, replacement and reconstruction of heating plants.
These amounts remain modest relative to the scale of Serbia’s wastewater, air-quality and district-heating investment requirements. The imbalance between transport construction and environmental infrastructure could become increasingly important as EU accession negotiations place greater emphasis on Chapter 27 compliance and municipalities seek finance for capital-intensive environmental projects.
Healthcare construction also moved slowly. Reconstruction of the University Clinical Centre of Serbia in Belgrade received RSD 233.7 million, only 6.7 per cent of the RSD 3.5 billion annual allocation. The Clinical Centre of Vojvodina in Novi Sad recorded expenditure of RSD 612.4 million from a planned RSD 2.77 billion.
No expenditure was recorded for the planned RSD 100 million reconstruction allocation at the University Clinical Centre in Niš. The figures do not capture total healthcare operating expenditure, but they indicate weak execution of several major hospital-capital programmes.
Energy-transition spending was particularly subdued. A biomass-market development programme financed through a KfW loan received only RSD 4.5 million from an initial annual allocation of RSD 538.9 million.
No expenditure was recorded for energy-efficiency improvements in central-government buildings despite RSD 582.9 million being budgeted. A separate RSD 721.2 million programme covering energy efficiency in public buildings and renewable energy in district heating spent only about RSD 7 million, or 1 per cent.
No spending was recorded for project and technical documentation connected with the proposed Đerdap 3 pumped-storage hydropower plant, although only RSD 1 million had been allocated for this purpose in 2026. The nominal size of the allocation indicates that the project remained at a very early preparatory stage rather than entering substantive engineering development.
Traditional energy-security and coal obligations moved more quickly. Serbia spent RSD 3.5 billion from a RSD 6.5 billion allocation for consolidation of the underground coal-mining company Resavica. The Energy Reserves Administration used RSD 2.67 billion of the RSD 5.44 billion planned for the formation and maintenance of mandatory oil reserves.
The first-half figures therefore show a public-investment hierarchy. Defence procurement, EXPO facilities, the National Stadium, the Surčin railway and the Belgrade metro received substantial funding. Energy efficiency, wastewater treatment, flood protection and several hospital projects progressed much more slowly.
That distribution may satisfy contractual deadlines attached to defence and EXPO, but it also concentrates fiscal and execution risk in a small group of politically important megaprojects. Serbia entered the second half of 2026 with large unspent allocations across civilian infrastructure and a reduced margin for delay as EXPO construction, defence payments and transport programmes continue competing for budget capacity.
