Serbia is entering the final part of 2026 with an increasingly unusual growth profile: economic activity is accelerating while headline industrial production remains almost stagnant, pointing to a widening divide between expanding services, construction and investment-linked sectors and weaker parts of traditional manufacturing and energy.
Gross domestic product increased 3.8% year on year in the second quarter, accelerating from the start of the year. Construction expanded 9.1%, while professional, scientific, technical and administrative activities grew 5.8%, making services and investment increasingly important contributors to expansion.
The National Bank of Serbia has raised its 2026 growth forecast to 3.2% and continues to expect 4.5% growth in 2027, when Expo-related spending and services are expected to provide additional support. The IMF is more cautious, forecasting growth of 2.8% this year and 4.0% in 2027.
Yet industry is giving a much weaker signal.
Industrial production increased just 0.3% in January-July, while July output was 2.3% lower year on year. Manufacturing dropped 1.6% in July and electricity, gas and steam production declined 8.8%, although mining expanded 3.0%.
The divergence matters because it suggests Serbia’s growth model is changing rather than simply accelerating across the board.
Capital-goods production increased strongly in the first seven months, automotive exports have surged, mining remains an important external earner and construction is expanding. At the same time, weaker energy production and subdued parts of consumer-oriented manufacturing are holding down aggregate industrial numbers.
The composition increasingly resembles an economy where investment, infrastructure, export manufacturing and services can grow despite relatively flat physical production overall.
Inflation provides some additional room. Consumer prices were only 2.2% higher year on year in August, while the NBS kept its policy rate at 5.75% in September. The central bank nevertheless remains cautious because it expects base effects and international commodity prices to push inflation higher again.
For companies, that means Serbia’s 2027 opportunity is unlikely to be evenly distributed.
Engineering, construction, automotive suppliers, mining contractors, business services, financial services and technology providers are positioned closer to the expanding parts of the economy. Energy-intensive and low-value manufacturing faces a more difficult combination of labour, electricity, financing and European demand pressures.
The key question for 2027 will therefore be less whether Serbian GDP can accelerate towards 4% and more how much of that growth turns into higher productivity, exports and private industrial investment rather than temporary infrastructure and consumption demand.
That distinction will determine whether the current acceleration becomes another investment cycle or a short-lived boost ahead of Expo 2027.
