Serbia’s merchandise trade deficit narrowed 12.6% in the first seven months of 2026 as exports grew twice as fast as imports in euro terms, improving the country’s external trade balance despite continued strong domestic demand.
Total trade in goods reached €46.60 billion between January and July, up 6.3% from the same period of 2025, according to the Statistical Office.
Exports increased 8.8% to €21.09 billion, while imports rose 4.4% to €25.50 billion.
The difference reduced Serbia’s merchandise trade deficit to €4.41 billion, from just over €5 billion in the corresponding period last year.
The ratio of exports to imports improved to 82.7%, compared with 79.4% a year earlier.
The figures provide one of the clearer signs that Serbia’s external trade position has strengthened during 2026, with export growth remaining resilient even as industrial output has shown a more uneven performance.
Measured in dollars, total foreign trade reached $54.17 billion, up 12.1% year on year.
Exports were worth $24.52 billion, an increase of 14.6%, while imports rose 10.1% to $29.65 billion.
The dollar-denominated deficit fell 7.6% to $5.13 billion.
The larger growth rates expressed in dollars partly reflect exchange-rate movements, making the euro figures a more useful measure for Serbia given the country’s close economic integration with the European Union and the euro area.
Exports strengthen faster than domestic import demand
The most important feature of the January-July figures is the widening gap between export and import growth.
At 8.8%, euro-denominated export growth was exactly twice the 4.4% increase in imports.
That represents an improvement from much of the recent period, when Serbia’s rapidly expanding investment and consumer demand frequently pushed imports higher and widened the merchandise deficit.
The stronger export performance is also significant because Serbia’s manufacturing sector experienced mixed conditions during the summer.
Industrial production fell 2.3% year on year in July, while manufacturing declined 1.6% and electricity, gas and steam production dropped 8.8%.
Despite those weaker industrial indicators, cumulative export growth remained robust.
Serbia’s economy expanded 3.8% year on year in the second quarter, with construction, household consumption and services among the main sources of growth.
That combination suggests the economy is currently being supported by both domestic demand and a comparatively resilient export sector.
The improving trade balance could help limit one of the traditional pressures associated with stronger Serbian economic growth: a rapid increase in imports of consumer goods, machinery, energy and industrial inputs.
EU remains dominant trading partner
The European Union accounted for 58.6% of Serbia’s total merchandise trade during the first seven months, maintaining its position as by far the country’s most important trading bloc.
The share underscores the extent to which Serbian manufacturing and supply chains remain integrated with the EU economy despite Belgrade’s efforts to diversify trade towards China, Turkey, the Middle East and other markets.
Germany, Italy and other EU economies remain important markets for Serbian automotive components, electrical equipment, machinery, metals and agricultural products, while the bloc is also the main source of machinery, industrial inputs and consumer goods entering Serbia.
For exporters, the EU’s dominant position means economic conditions in Germany and Central Europe remain particularly important.
Serbia has attracted substantial foreign direct investment into export-oriented manufacturing over the past decade, with factories integrated into European automotive, electrical equipment, machinery and industrial supply chains.
The resulting expansion of manufacturing capacity has increased export volumes but also created substantial imports of components and intermediate goods.
The latest figures suggest exports from those industries, alongside agriculture and other sectors, are currently growing sufficiently quickly to improve the overall trade balance.
CEFTA delivers almost €2 billion surplus
Trade with neighbouring members of the Central European Free Trade Agreement, or CEFTA, continued to provide Serbia with a large surplus.
Exports to CEFTA countries reached €2.82 billion during January-July, compared with imports of €908.8 million.
That produced a trade surplus of €1.91 billion, with exports covering more than 310% of imports.
The surplus was driven primarily by exports of cereals and cereal products, beverages, road vehicles, pharmaceuticals, electrical machinery and equipment.
CEFTA markets remain particularly important for Serbian companies because they provide geographically close destinations where Serbian producers have established distribution networks and relatively strong market positions.
Unlike Serbia’s trade with many larger economies, where imports of energy, machinery and industrial goods can generate significant deficits, trade with the Western Balkans consistently produces a substantial positive balance.
The size of the CEFTA surplus means regional trade plays an important role in offsetting deficits recorded elsewhere.
Serbia exported more than three euros of goods to CEFTA members for every euro imported during the first seven months.
July trade remained strong
Comparison with the January-June data also points to substantial trading activity in July.
Serbia’s total merchandise trade increased from €39.65 billion at the end of June to €46.60 billion at the end of July, implying trade of roughly €6.95 billion during July alone.
Exports during the month were approximately €3.12 billion, while imports were around €3.82 billion.
That produced a monthly merchandise deficit of about €701 million.
The July figures are important because they show export activity remained substantial even as official industrial-production data weakened during the month.
They also underline the distinction between industrial production and merchandise exports.
Goods exported in a particular month can include products manufactured earlier, agricultural commodities, inventories and output from individual industries that are performing significantly better than the aggregate industrial index.
Motor vehicle production, for example, increased strongly in July even as overall manufacturing contracted.
External balance improves as economy expands
The narrowing trade deficit comes at a favourable point for Serbia’s broader macroeconomic position.
Economic growth accelerated to 3.8% in the second quarter from 3.2% in the first, while household consumption, construction and retail activity remained strong.
Normally, a strengthening domestic economy would be expected to increase import demand and put pressure on the trade balance.
Instead, exports have so far grown considerably faster.
If maintained, that trend could reduce the drag from net trade on economic growth and moderate Serbia’s external financing requirements.
The trade balance is only one component of the country’s broader current account, which also includes services, investment income and transfers.
Serbia has developed a substantial services export sector, particularly in information technology, transport and business services, helping compensate for the structural deficit in merchandise trade.
Foreign direct investment has also historically provided an important source of financing for the current-account gap.
A smaller goods deficit would further strengthen that external position.
Export structure remains central challenge
The longer-term question is whether Serbia can sustain faster export growth while increasing the domestic value added contained in those exports.
Much of the country’s manufacturing expansion has been driven by foreign-owned plants embedded in international supply chains. These businesses generate exports but can also require significant imports of machinery, components and raw materials.
The economic benefit therefore depends not only on gross export values but on the proportion of production sourced domestically.
Serbia has sought to move towards higher-value sectors through investment in electric vehicles, batteries, electronics, advanced manufacturing, information technology and other industries.
The increasing presence of Chinese industrial investment has also begun to change the geographical and sectoral composition of trade, particularly in mining, metals and automotive manufacturing.
At the same time, the EU remains the overwhelmingly dominant commercial partner and the principal market determining demand for Serbian industrial exports.
That leaves Serbia exposed to weak growth in Germany and other large European economies, particularly through automotive and industrial supply chains.
Trade gap moves in favourable direction
For the first seven months of 2026, however, the direction of Serbia’s merchandise trade indicators is favourable.
Exports of €21.09 billion grew 8.8%, imports of €25.50 billion increased only 4.4%, and the deficit narrowed 12.6% to €4.41 billion.
Import coverage rose by more than three percentage points to 82.7%, while Serbia maintained a particularly strong €1.91 billion surplus with CEFTA economies.
The performance suggests Serbia entered the second half of the year with its external goods balance improving even as domestic economic growth accelerated.
Whether that improvement can be sustained will depend increasingly on European industrial demand, Serbia’s manufacturing performance and the extent to which strong domestic consumption and investment translate into faster import growth during the remainder of 2026.
