Serbia’s revised 2026 budget says as much about the government’s economic strategy as it does about the strength of public finances. Revenues are running materially ahead of the original plan, but instead of allowing the additional income to flow primarily into deficit reduction, Belgrade is using much of the fiscal space to expand expenditure.
The revised framework raises planned revenues and receipts to around RSD 2.527 trillion, approximately RSD 112.5 billion above the initial plan. The government is simultaneously increasing expenditure to roughly RSD 2.923 trillion, pushing the projected deficit towards RSD 396 billion.
The economic logic is straightforward. Serbia is approaching Expo 2027 while simultaneously financing transport, utility and urban infrastructure, social measures and a wider investment programme. Stronger tax collection gives the government more room to sustain that cycle without relying entirely on additional borrowing.
But the choice carries an opportunity cost. Revenue significantly above plan could have been used to accelerate fiscal consolidation and create a larger buffer against external shocks. Instead, Serbia is effectively choosing growth support today over faster deficit reduction.
The decision looks less risky because public debt remains relatively contained as a share of output and nominal GDP continues to expand. The revised budget is based on economic growth of around 3.3%, with GDP estimated at approximately €95 billion.
Yet the real test will come after Expo-related expenditure peaks. Temporary infrastructure investment can generate valuable long-term assets. Permanent expenditure commitments are more difficult to unwind.
Serbia’s fiscal story is therefore no longer simply one of whether the government can collect enough revenue. The tax base is performing strongly. The more consequential question is what Belgrade chooses to do with the additional money.
For 2026, the answer is clear: Serbia is keeping the fiscal accelerator partially depressed.
