Serbia’s external position improved visibly in the first four months of 2026, but the financing structure behind that improvement is more complicated than the headline current-account number suggests. The current-account deficit narrowed to €404.9mn in January–April, down €934.2mn, or 69.8%, from €1.34bn in the same period of 2025. The improvement was driven mainly by a smaller goods deficit, higher remittances and a stronger services surplus. That is a meaningful macro stabiliser.
The quality of the improvement is mixed. A smaller goods deficit is clearly positive, especially because it reflects stronger export performance rather than a collapse in domestic demand. Higher remittances also provide an important household and balance-of-payments buffer. MAT records a net remittance inflow of €1.30bn in January–April, up 36.2% year-on-year. The services surplus also improved by 17.8%, adding another layer of support. For a small open economy, this combination reduces pressure on the currency and external financing needs.
But the income account tells a different story. The net outflow of direct-investment income reached €1.26bn, up 11.8%, driven by dividend payments. Net dividend outflows amounted to €727.8mn, up 61.6% year-on-year, while reinvested earnings fell. This matters because Serbia’s FDI-heavy growth model creates recurring income outflows once foreign-owned businesses mature. FDI brings capital, jobs and exports, but it also creates a future claim on profits. The more Serbia relies on foreign-owned export platforms, the more dividend flows become an important part of the external-account equation.
The financial account reinforces the caution. Direct investment liabilities into Serbia stood at €600.4mn in January–April, down from €1.07bn a year earlier. In April alone, net FDI inflow by non-residents was €216.4mn, down 26.7%year-on-year. That does not necessarily signal a structural reversal, but it shows that Serbia’s external financing story cannot rely only on the assumption that FDI inflows will always offset current-account and income pressures.
Reserve use adds another layer. Foreign-exchange reserves fell by €1.31bn in balance-of-payments terms in January–April, while the National Bank of Serbia net sold €1.205bn from the start of the year to maintain relative dinar stability against the euro. This confirms that exchange-rate stability remains actively managed. It also shows that a better current-account number does not automatically eliminate the need for reserve intervention when capital flows, corporate payments and market expectations move in the other direction.
For banks and investors, Serbia’s external story should be read as a stronger but not frictionless position. Export growth is improving the trade base, services and remittances are supportive, and the current-account deficit is much smaller. At the same time, dividend outflows are rising, FDI inflows are lower than last year, and reserve use remains material. Serbia’s external resilience is improving, but it still depends on maintaining export growth, attracting productive investment and avoiding a widening gap between profit repatriation and new capital formation.
