Serbia’s 2026 draft budget is soon expected to be presented to the National Assembly, with President Aleksandar Vučić announcing a 5.1% increase in public sector salaries starting January 1, 2026. Although the International Monetary Fund (IMF) advised limiting the raise to 4%, the government decided on a slightly higher increase.
Economists believe the 5.1% pay rise will not threaten Serbia’s macroeconomic stability, noting that the country faces more serious challenges such as high inflation, reduced foreign direct investment, and unresolved issues regarding the Petroleum Industry of Serbia (NIS). They add that if budget constraints arise, the government can reallocate funds from other projects to cover wage increases.
Public sector salaries, pensions, and the minimum wage will all rise from January. Pensions are set to increase by 12.2%, and the minimum wage will reach around 550 euros. Experts say these measures could have a moderate inflationary effect but are unlikely to destabilize the economy.
Economist Saša Đogović stated that Serbia’s main risks come from inflation, the drop in foreign investments, and political instability, not from the planned pay raise. He noted that Serbia lacks an effective anti-inflation framework, calling for a stronger Competition Protection Agency and agricultural policies adapted to climate change.
Veljko Mijušković from the University of Belgrade’s Faculty of Economics agreed that the increase is fiscally sustainable, financed through higher tax revenues and without new borrowing. He described the move as a sign of fiscal responsibility, reflecting the government’s efforts to support living standards while maintaining budgetary stability.
Both experts emphasized that Serbia’s fiscal position remains stable but warned that future challenges—particularly political uncertainty and inflation—must be managed carefully to preserve economic growth and public trust.
