Serbian companies entered 2026 with falling turnover, rising input costs and a deterioration in business confidence, but expectations for the second quarter point to a substantial change in direction. The recovery is not yet evenly distributed across the economy, and the gap between larger companies and smaller domestic businesses remains one of its defining features.
Only 19% of the 1,265 companies surveyed by the Chamber of Commerce and Industry of Serbia increased turnover during the first quarter compared with the final quarter of 2025. Another 40% maintained the same level, while 41%recorded a decline. Companies reporting growth achieved an average turnover increase of 24%, whereas those moving in the opposite direction suffered an average contraction of 27%.
The comparison with the fourth quarter requires caution. The final three months of the year are typically stronger for retail, tourism, logistics, construction billing and companies completing annual orders. First-quarter weakness therefore reflects both economic conditions and seasonality. Even after allowing for that effect, the proportion of companies reporting declining turnover was sufficiently large to indicate a genuine loss of momentum.
Corporate assessments of the business climate reinforce that reading. Only 8% considered conditions better than in the previous quarter, while 38% believed they had deteriorated. The remaining 54% reported little change. Expressed as a directional balance between positive and negative responses, business sentiment stood at minus 30 percentage points.
The second-quarter outlook is materially different. Around 43% of companies expect turnover to increase, 45%anticipate no change and only 12% foresee a decline. Companies expecting growth project an average increase of 23%, while those preparing for weaker business expect an average contraction of 24%. The turnover balance therefore changes from minus 22 percentage points in the first quarter to plus 31 points in the second—a swing of 53 percentage points.
Official national-account data do not contradict the survey’s weak first-quarter tone. Serbia’s economy expanded by approximately 3.0% year on year during Q1, but the increase was led mainly by services and domestic consumption. Service-sector activity rose by an estimated 4.3%, contributing roughly 2.5 percentage points to GDP growth, while industrial production declined by about 0.8%.
Household consumption increased by an estimated 4.3%, supported by higher real wages, pensions and consumer borrowing. Average net earnings reached RSD 118,398 in May, equivalent to slightly above €1,000, while real net wages during January-May were 8.2% higher than a year earlier. Retail turnover in May increased by 6.2% in real terms.
Corporate performance nevertheless remained less convincing than headline GDP. The industrial economy was affected by disruption in the oil and chemical value chain, uncertainty surrounding NIS, softer external demand and high imported-input costs. Fixed investment increased by around 2.5% during the first quarter, but private investment sentiment was weaker than Serbia’s government-led infrastructure cycle might suggest.
The second-quarter improvement is expected to be led by tourism, trade, agriculture, construction, metals and energy. Tourism and hospitality produced the strongest turnover expectations, with 55% of respondents anticipating growth. Trade followed at 49%, while 47% of agricultural companies and 46% of construction, metalworking and energy companies expected higher turnover.
Scale remains decisive. Approximately 58% of large companies expect turnover to grow in the second quarter, compared with 47% of medium-sized businesses, 41% of small companies and 37% of microenterprises. Larger companies are benefiting from better access to bank financing, international customers, public infrastructure contracts and stronger working-capital reserves.
The anticipated improvement therefore resembles a broad operational rebound rather than a uniform acceleration. Serbia’s economy is entering the middle of the year with stronger domestic demand and a healthier export performance, but industrial output, liquidity and cost pressures still limit the depth of the expansion. The quarter will be defined less by whether revenue grows than by whether companies can convert that growth into margins, cash flow and new investment.
