Serbia’s economic outlook for 2026 is being revised downward, as rising fuel prices and unresolved uncertainty around the country’s key oil company begin to feed through into growth expectations and domestic demand.
Banking sector analysts now see GDP expanding by around 2.4% in 2026, down from earlier projections of 2.75%, marking a continued slowdown in economic momentum. The revision aligns with broader international downgrades, with multilateral forecasts also trimmed in recent weeks amid a more challenging global environment.
The primary driver behind the downgrade is the surge in global oil prices, which has pushed energy costs significantly higher across the region. Oil is now expected to remain in the $80–90 per barrel range, well above previous baseline assumptions of $55–60, reflecting persistent geopolitical risk premiums and ongoing disruptions in supply chains.
Higher fuel prices are already transmitting into the domestic economy. Analysts point to a direct impact on household consumption and corporate spending, as transport and input costs rise, reducing disposable income and compressing margins across sectors. The effect is expected to intensify through the year, particularly if energy prices remain elevated.
At the same time, the operational and ownership uncertainty surrounding NIS, Serbia’s dominant oil and refining company, is adding an additional layer of risk. While the company continues to operate, it is not functioning at full capacity, and negotiations over a potential ownership restructuring remain unresolved, with key deadlines approaching.
This combination—external energy shock and internal energy-sector uncertainty—has reinforced concerns about the resilience of Serbia’s growth model. Analysts note that the country’s reliance on foreign direct investment as a primary growth driver is becoming increasingly vulnerable in a more volatile geopolitical environment, limiting upside potential even before the latest energy shock.
Despite these pressures, some stabilizing factors remain. Investment activity, particularly linked to large-scale infrastructure projects and preparations for EXPO 2027, has begun to recover after a slowdown in 2025, providing a partial offset to weaker consumption. Government intervention measures—including temporary fuel price caps, reduced excise duties and releases from strategic reserves—are also expected to cushion the immediate impact of rising energy costs.
However, downside risks remain significant. In a more adverse scenario where energy prices stay elevated or escalate further, analysts warn that Serbia’s growth rate could fall to around 1.2%, effectively halving current expectations and exposing the economy to a much sharper slowdown.
The emerging picture is one of an economy still growing, but increasingly constrained by external shocks and structural dependencies. Energy costs, geopolitical developments and the resolution of key industrial assets such as NIS are now central variables shaping Serbia’s near-term economic trajectory.
