The latest economic assessment from Raiffeisen Bank Serbia for April 2026 portrays a Serbian economy that continues to expand at a solid pace, even as inflation eases and external conditions remain uneven.
Real GDP growth has remained resilient in early 2026, supported by a combination of domestic demand recovery and continued investment activity. The report highlights that Serbia’s growth model is still anchored in consumption and capital expenditure, with public infrastructure projects and private-sector investment sustaining momentum despite tighter financial conditions compared with previous years.
Inflation, which dominated the macroeconomic landscape throughout 2022–2024, has continued its downward trajectory. Price pressures have moderated significantly, reflecting both the normalization of global commodity markets and the lagged impact of monetary tightening by the National Bank of Serbia. Food and energy components—historically the most volatile drivers—have shown clearer signs of stabilization, although services inflation remains more persistent, indicating underlying demand strength.
The disinflation process has allowed monetary policy to shift toward a more neutral stance. While interest rates remain elevated in nominal terms, the tightening cycle appears to have peaked, with expectations gradually turning toward cautious easing. This shift is already feeding into improved credit conditions, particularly for corporates, where investment financing remains a critical driver of economic activity.
On the external side, Serbia’s current account dynamics reflect a complex adjustment process. The trade deficit remains structurally present, driven by strong import demand linked to investment and consumption. However, export performance—particularly in manufacturing and energy-related segments—has provided partial offset. The report underscores the continued importance of European demand, especially from Germany and Italy, as a key determinant of Serbia’s export trajectory.
Foreign direct investment continues to play a central role in financing the external imbalance. Serbia has maintained a relatively stable inflow of FDI, supported by its positioning as a near-shore manufacturing hub for European supply chains. Industrial projects in automotive components, electronics, and energy infrastructure remain particularly prominent, reinforcing the country’s integration into regional production networks.
Labour market conditions remain tight, with unemployment at historically low levels and wage growth continuing to outpace inflation in real terms. This dynamic supports consumption but also introduces cost pressures for employers, particularly in labour-intensive sectors. The report notes that productivity improvements will become increasingly important in sustaining competitiveness, especially as wage convergence with EU markets accelerates.
Fiscal performance has remained broadly stable, with public finances benefiting from solid revenue collection and controlled expenditure growth. The fiscal deficit remains manageable, while public debt levels continue to trend within sustainable ranges. At the same time, the report points to ongoing capital spending commitments—particularly in transport and energy infrastructure—which will keep fiscal policy expansionary in structural terms.
Energy remains a critical variable in the macroeconomic outlook. Serbia’s electricity system, dominated by lignite and hydropower, continues to face structural challenges related to reliability and transition requirements. Investments in renewable energy and grid modernization are gradually gaining pace, but the system remains exposed to both weather variability and regional market volatility.
Looking ahead, the baseline outlook suggests continued moderate growth, supported by easing inflation, stable financial conditions, and ongoing investment flows. However, external risks remain significant. Slower growth in the eurozone, geopolitical uncertainties, and fluctuations in global commodity markets all represent potential headwinds for Serbia’s export performance and overall economic stability.
The report ultimately frames Serbia’s current position as one of relative macroeconomic stability, underpinned by steady growth and improving price dynamics, but still reliant on external demand and capital inflows. The transition toward a more balanced growth model—less dependent on imports and more driven by domestic productivity gains—remains the central challenge shaping the medium-term trajectory.
