Serbia’s external balance has improved at precisely the moment when global energy conditions should have been making it worse. The current-account deficit fell to €1.4bn in the first half of 2026, around 30% lower than a year earlier, even as Middle East tensions pushed up oil prices and increased Serbia’s energy-import bill.
The improvement is one of the most consequential findings in the National Bank of Serbia’s August Inflation Report because it suggests that the economy’s export structure is becoming more resilient to external shocks.
Exports of goods and services increased 7.9% year on year in the first half, while imports grew 4.9%. Export coverage of imports rose to a record average of around 95%. The NBS divides the improvement into two components: a longer-term structural effect from past investment and rising export capacity, and shorter-term developments in 2026 that have further compressed the deficit.
The structural shift is visible in the trade deficit itself. After averaging 13.5% of GDP in 2011-2013, the goods-and-services trade deficit gradually narrowed. For 2023-2025, it averaged 4.7% of GDP, and in the first half of 2026 it fell to 3.1%. The NBS attributes much of the change to foreign direct investment, expanded manufacturing capacity and growing service exports.
The 2026 export story is particularly concentrated in a few high-growth segments. Stellantis expanded production at its Kragujevac plant, pushing motor-vehicle exports up 51.1% in the first half. Mining exports increased 34.7%, with copper benefiting from a global price rise of almost 40%. Manufacturing exports were 9.0% higher, with growth across 15 of 23 branches.
The energy account moved in the opposite direction. Serbia’s energy deficit reached roughly €2bn in the first six months, worsening by €252.4mn from the corresponding period of 2025. Oil and oil products were the main source of deterioration. The average imported price of crude oil was 29.5% higher, while imported petroleum-product prices were around 17% higher.
Looking only at March through June, after the escalation in the Middle East, the deterioration is even clearer. Energy imports increased by about €268.6mn relative to the same period a year earlier, while energy exports declined by €152.7mn, worsening the energy balance by approximately €421.4mn.
That the overall current account improved despite this hit is economically significant. It means the non-energy export economy was strong enough to absorb a substantial imported-energy shock without reproducing the external imbalances Serbia experienced in earlier periods.
Services are becoming increasingly important in that adjustment. In the first half, service exports rose 5.9%, led by business services, ICT, transport and a recovery in tourism. Service imports grew more slowly, at 4.4%. In the second quarter alone, Serbia recorded a €703mn services surplus, with exports up 10.9% year on year.
The financing side of the balance of payments deserves equal attention. Gross FDI inflows in Q2 were €843.5mn, or 3.5% of GDP, about 12% lower than a year earlier. But because Serbian residents invested less abroad, net FDI inflows reached €633.9mn, 26% higher year on year. Gross FDI exceeded €1.2bn in the first half, dominated by reinvested earnings and equity capital.
Portfolio flows were much larger. Net portfolio inflows reached €3.9bn in Q2, reflecting international sovereign and corporate bond issuance. Serbia itself sold roughly €3bn equivalent of Eurobonds in three tranches, while corporates issued around €1.95bn equivalent. Much of the proceeds were used to refinance earlier bonds or repay financial loans rather than finance new consumption.
This changes the interpretation of the external financing mix. Serbia remains able to attract direct investment, but 2026 capital inflows have been unusually influenced by market borrowing and liability management. That makes global risk appetite, sovereign spreads and euro-area rates more relevant to the balance of payments than during periods when FDI dominated financing more decisively.
The NBS nevertheless expects the current account to remain manageable. It has reduced its 2026 deficit forecast to 4.1% of GDP, with the ratio declining to around 3% in 2027 as Expo-related tourism and business-service exports strengthen. For 2028, the deficit is expected to move back towards an estimated equilibrium level of around 4% of GDP.
Net FDI is expected to average about 3% of GDP over the next several years. That would not fully cover every projected current-account deficit, making portfolio flows and other financing channels relevant. But the combination of stronger exports, sizeable reserves and access to international bond markets provides more protection than headline current-account numbers alone suggest.
There are vulnerabilities. Serbia remains a net importer of energy, and the NBS’s pessimistic geopolitical scenario demonstrates how quickly higher oil prices could worsen inflation, growth and external demand. Large infrastructure projects are also likely to raise imports of capital goods and intermediate materials as the Expo-era investment programme peaks.
At the same time, the export base is visibly broader than it was a decade ago. Automotive manufacturing, copper and mining, business services, ICT and tourism increasingly sit alongside more traditional export activities. The first-half result shows that these sectors can offset at least part of a substantial energy shock.
The €1.4bn current-account deficit therefore tells a larger story than one favourable six-month period. Serbia is entering its next investment cycle with an external position that has become structurally less fragile, even though the coming years will test whether the improvement can survive higher infrastructure imports, volatile energy markets and weaker European growth.
