The Serbian consumer has again become the stabiliser of the economy. In Q1 2026, private consumption rose by 4.9% year-on-year, adding 2.9 percentage points to GDP growth, while retail turnover increased by 9.3% in current prices and 8.6% in constant prices. Those numbers are stronger than the industrial and construction readings, and they explain why Serbia’s GDP growth accelerated even though fixed investment and hard production remained soft.
The support is coming from real wages. The average net wage in Q1 2026 reached RSD 118,736, an increase of 11.7% nominally and 8.8% in real terms compared with the same period of 2025. In March 2026, the average net wage was around €1,036, up 12.4% year-on-year. That is not a marginal shift. It changes spending power in food retail, household goods, hospitality, domestic travel, consumer services and imported durables.
Inflation has moderated enough to allow real consumption to breathe. Average annual consumer price inflation in Q1 2026 was 2.6%, down from 4.5% a year earlier. The pressure has not disappeared; electricity, healthcare, utilities, tobacco and fruit accounted for more than half of the quarterly price increase. But the broad inflation shock has faded, allowing wage growth to translate into actual demand rather than simply compensating for higher prices.
April data suggest that consumption did not collapse after the first quarter. Retail turnover in April 2026 was 8.3% higher in current prices and 5.6% higher in constant prices than a year earlier. That points to a slower but still positive consumption path entering the second quarter.
The base-case projection is for real household consumption to grow by 3.5–4.5% in 2026, slower than the first-quarter pace but still the strongest domestic-demand component. The risk is margin compression. Retailers and service providers will benefit from stronger turnover, but labour costs, rent, logistics and regulated utility prices will limit profit expansion. Banks will see stronger card spending and consumer-credit demand, while exporters may face higher wage bills without equivalent productivity gains.
Serbia’s consumer economy is therefore not a soft story. It is the current growth engine. But it also highlights the imbalance: the household sector is moving faster than the investment sector, and that cannot remain the main driver indefinitely.
