Revenues across Serbia’s non-financial corporate sector accelerated sharply in the second quarter while costs increased more slowly, adding evidence that economic growth is spreading through the private economy as companies simultaneously increase borrowing and investment.
Business revenues rose 9.7% year on year in the second quarter, accelerating from 6.4% in the first three months of 2026, according to the Statistical Office.
Compared with the first quarter, revenues increased by about 11%.
Corporate expenses rose more slowly, increasing 7.8% year on year, after growth of 5.4% in the first quarter.
The figures do not provide a direct measure of corporate profitability, and higher revenues than expenses at the aggregate growth-rate level cannot automatically be translated into wider profit margins.
But the divergence indicates that turnover accelerated more rapidly than the cost base during the quarter.
That gives the latest data greater significance than a simple nominal revenue increase.
Serbia’s economy expanded by around 3.8% year on year in the second quarter, supported by investment, consumption and construction.
The corporate data suggest that growth was also being reflected in business activity across a wider portion of the economy.
Information and communications companies recorded revenue growth of 8.3%, below the increase for the non-financial business sector as a whole.
That is notable because Serbia’s ICT industry has been one of the country’s fastest-growing sectors over the past decade.
Overall revenue growth exceeding ICT growth suggests the expansion is increasingly being generated across construction, trade, manufacturing and other parts of the economy rather than being disproportionately driven by technology companies.
The picture is reinforced by the banking data.
Serbian banks approved RSD 436.4 billion of new corporate loans during the second quarter, 27.2% more than a year earlier.
New business lending reached RSD 725.5 billion in the first half, while the outstanding corporate loan stock was 11.7% higher year on year in June.
More importantly, investment lending has been growing faster than traditional liquidity financing.
Corporate investment loans were 14.6% higher year on year, compared with 12.5% growth in working-capital and liquidity loans.
Micro, small and medium-sized companies generated almost two-thirds of the second-quarter increase in corporate borrowing.
Taken together, the revenue and credit data point to a potentially broader domestic investment cycle.
Serbia’s recent economic expansion has often been viewed primarily through three drivers: large foreign direct investments, government infrastructure expenditure and household consumption.
Those remain important.
But stronger revenues combined with rising SME investment borrowing suggest that domestically based companies may be participating more actively in the expansion.
That would make the growth structure more resilient if it leads to new productive capacity.
There are, however, reasons for caution.
A significant part of recent credit growth has been concentrated in real estate, construction and trade, rather than exclusively in export-oriented manufacturing or technology.
Serbia is already experiencing high levels of construction activity linked to infrastructure, Expo 2027 projects, residential development and commercial property.
If additional corporate borrowing primarily finances sectors already benefiting from that cycle, stronger revenues could partly reflect an economy becoming more concentrated around construction and domestic demand.
The distinction matters for long-term growth.
Investment in machinery, industrial automation, export production and technology can increase productivity and foreign-currency earnings.
Property development and retail expansion can also support growth but tend to depend more heavily on domestic demand, credit conditions and asset values.
The latest revenue figures do not provide enough sectoral detail to determine which model is becoming dominant.
But they show corporate activity accelerating despite borrowing conditions that remain relatively expensive.
Average rates on new dinar corporate loans have remained around 7%, while investment loans can carry materially higher costs depending on maturity and borrower risk.
Banks have also reported tighter lending standards.
Companies are therefore increasing both revenues and borrowing without the benefit of exceptionally cheap credit.
That may indicate stronger confidence about expected demand and investment returns.
It can also increase sensitivity to any slowdown.
Projects financed at today’s interest rates need to generate sufficiently high cash flows to service debt even if economic growth moderates.
The quality of the investment cycle will therefore depend increasingly on the productivity of the assets companies are financing.
Serbia’s banking sector currently has substantial capacity to support the expansion.
Banks remain liquid and profitable, while corporate non-performing loans are close to historic lows.
That gives lenders room to increase credit without immediately weakening asset-quality indicators.
But strong credit growth can become a lagging risk if lending standards deteriorate or investment becomes overly concentrated in cyclical sectors.
For now, the corporate data suggest the opposite: banks have tightened standards while businesses continue to borrow.
The combination of 9.7% revenue growth, slower 7.8% expense growth and double-digit corporate credit expansion provides a stronger picture of business-sector momentum entering the second half of the year.
It also shifts the analytical focus.
The question is no longer simply whether Serbia can maintain GDP growth near current levels.
It is whether that growth is producing a broader and more productive corporate investment cycle.
If revenue gains continue to spread across manufacturing, services and smaller domestic companies, Serbia could become less dependent on a limited number of large foreign investment projects for business expansion.
If growth remains concentrated in construction, property and consumption-related sectors, the economy could instead become more sensitive to interest rates and domestic demand.
The latest numbers are encouraging because business revenues are accelerating faster than costs and investment borrowing is increasing.
The next test is whether that additional cash flow and credit are converted into higher productivity, export capacity and sustainable corporate earnings, rather than simply more leverage inside Serbia’s existing growth cycle.
