EC Serbia’s Economy Slows, Risks to Growth Emerge, Political Instability Evident

European Commission building (BETAPHOTO/EK/Lukasz Kobus)

Political unrest and student-led protests in Serbia, combined with global uncertainties over customs tariffs and trade, have affected consumer confidence, business confidence, and foreign direct investment - cut in half compared to 2024, the European Commission (EC) said in its forecasts published on Nov. 17.

In its autumn economic outlook, the Commission has warned that Serbia’s economy slowed significantly in the first half of the year, with GDP growth of around two percent compared to roughly four percent the previous year. For 2025, the Commission projects Serbia’s GDP growth at 2.2 percent, down from 3.9 percent a year earlier. A sharp jump in imports of 10.5 percent, compared to export growth of 6.5 percent, also had a strong negative effect on growth.

The Commission’s analysts predict a growth recovery to 3.3 percent in 2026 and then 4.2 percent in 2027, as domestic demand benefits from rising household incomes and public investments under the “Leap into the Future – Serbia 2027” program and the EXPO 2027 specialized exhibition.

As for the general outlook, the Commission says that risks prevail, as political instability has reduced foreign direct investment in Serbia, with economic uncertainties rising. The report also points to a government intervention in the retail market, relying on margin caps, as well as U.S. sanctions against the Oil Industry of Serbia (NIS).

Among EU candidate countries in the Western Balkans, only Bosnia and Herzegovina is expected to report a lower GDP growth rate, expected to oscillate around 1.8 percent.