Serbian companies are facing serious difficulties rooted in the internal structure of the economy and its excessive dependence on global trends. According to the Business Top 2024/25 edition of Biznis i finansije, systemic weaknesses have caused Serbia to rely too heavily on foreign investors, who are now withdrawing as the advantages that originally attracted them diminish. At the same time, domestic private investment remains among the lowest in Europe.
Because of this vulnerability, Serbia immediately feels the effects of any slowdown in global trade, decline in foreign investment, geopolitical tensions, or new tariff announcements. This is identified as the main risk for the coming period.
In 2024, Serbian companies generated a profit of 866.3 billion dinars — 9 percent less than in 2023. Among the top 100 most profitable companies, the leading sectors were trade and construction. However, trade results for 2025 are expected to weaken due to the government’s decision to cap margins on basic goods. Construction activity is forecast to fall sharply across Serbia (except in Belgrade), which will weigh heavily on GDP growth in 2025.
Economic and political instability has reduced demand and worsened business results in most sectors.
Productivity and labor issues
Serbia uses labor and material resources inefficiently. Workers in the EU work five hours less per week but are 4.2 times more productive per hour. Productivity gaps are especially high in agriculture, where the EU is 8.7 times more productive. Even in the IT sector — Serbia’s strongest — productivity is significantly lower than in EU countries.
Unit labor costs in Serbia are high relative to productivity, further weakening competitiveness. Workers feel underpaid, while employers believe labor is too expensive — both symptoms of structural inefficiency.
Business sentiment at lowest level since the pandemic
Research shows that business confidence among Serbian companies is at its lowest level since 2020. Concerns are strongest in trade, industry, and construction. Although most leading SMEs saw revenue growth last year, inflation means that for many, real growth was negligible.
More businesses now view economic and political instability as the main obstacle to progress.
Labor shortages, rising costs and migration
Companies see rising operational and labor costs as the biggest threat to financial stability. Employers are forced to raise wages because of severe labor shortages. Foreign workers are increasingly filling gaps, but they are not cheap — only available.
Serbia loses around 11,000 more people to emigration each year than it gains from immigration. Migrants and returnees make up around 14% of the population and tend to be younger. They also start businesses more often than the domestic population.
Sector performance and risks
- Energy and mining have struggled for two years due to poor hydrology and reduced NIS refinery operations under U.S. sanctions.
- Coal mining saw a boost thanks to increased lignite production.
- Food industry started 2025 with weaker results due to limited raw materials and strong foreign competition.
- Metals and electrical industries — which make up nearly 46% of Serbian exports — are under pressure from falling orders and rising costs. U.S. tariffs and new EU protective measures threaten Serbia’s position in global supply chains.
- Automotive industry growth from 2023 is slowing due to the downturn in Europe’s motor vehicle market.
- Rubber and plastics remain export-positive but face challenges from recession in Europe’s auto sector and U.S. tariffs.
- IT sector, despite high productivity, remains overly dependent on foreign clients. Serbia mainly “rents out” programmers instead of developing its own products. The state could earn 1.5–3 billion euros annually if Serbia created proprietary software — compared to roughly 800 million euros contributed by the IT sector today.
