EBRD forecasts Serbian economy to grow by 2.5 pct in 2025 and 3.3 pct in 2026

LONDON - The Serbian economy will grow by 2.5 pct in 2025, accelerating to 3.3 pct growth in 2026 due to EXPO 2027-related investment, the European Bank for Reconstruction and Development (EBRD) said in a Regional Economic Prospects report released on Thursday.

Relative to its projection from May, the EBRD revised the 2025 forecast for Serbia downwards by 1 pp, with the 2026 forecast downgraded by 0.4 pct.

"Economic growth moderated to 2 pct year-on-year during the first half of 2025, following two years of robust expansion. The principal drivers of growth were the information and communication services and manufacturing sectors, underpinned by the commencement of the serial production of electrical vehicles and increased tyre output, while construction weighed negatively on overall growth," the report says.

"Social unrest adversely impacted trade, hospitality and related industries. While household and government consumption continued expanding, investment declined, and net exports were negative. The current account deficit doubled in the first half of the year.

Inflation remained elevated at 4.9 pct in July 2025 reflecting both rising food prices sticky core inflation. Government expenditures grew at a faster pace due to higher wages and increased social transfers, resulting in a shift to a small deficit in the period January to July 2025. Real GDP growth is forecast at 2.5 pct in 2025, accelerating to 3.3 pct in 2026 supported by EXPO-related investment.

Downside risks stem from ongoing domestic political tensions and potential global trade disruptions, which could constrain exports and inflows of foreign direct investment and weigh on structural reforms. However, stronger automotive exports and accelerated infrastructure investments could drive growth in the second half of the year," it also says.