European Commission Predicts 2.8 Percent Economic Growth for Serbia This Year

EXPO 2027 (BETAPHOTO/MILAN ILIC)

After a significant slow-down last year, Serbia’s economic growth will reach 2.8 percent this year and 3.9 percent in 2027, because domestic demand will benefit from major public investments around the specialized EXPO 2027 and the growing salaries and pensions, the European Commission predicted on May 21.

In its Spring Economic Forecast, the European Commission also predicted that Serbia’s fiscal deficit would temporarily increase to 3.2 percent in 2026, because the government had lowered the fuel excise duties in response to the Middle East conflict, and that the public debt would increase slightly to 45 percent of the gross domestic product (GDP) next year.

The Commission went on to say that Serbia’s economic growth slowed down to two percent in 2025 from 3.9 in 2024, due to slower investment growth and less private spending as a result of continuous political unrest amid the students’ protests, and to the negative contribution of net exports. Furthermore, net foreign direct investments were half of what they were in 2024. It was further stated in the report that short-term indicators fluctuated at the start of 2026, that the indicator of economic disposition, although still below the long-term average, showed an advancement trend in Q1, but that industrial production registered a drop in most sub-sectors except the automobile industry.

It was concluded in the part of the report about Serbia that, although economic prospects seem positive, several risks remain for a negative scenario, including continuous domestic political instability and the recent decline in foreign direct investments, which could potentially jeopardize the medium-term growth prospects.