EC cuts Serbia’s 2025 GDP growth forecast to 3.2%

The European Commission said on Monday it expects the Serbian economy to expand by 3.2% this year, lowering its previous forecast for 4.2% growth made in November.

Serbia’s GDP growth is expected to strengthen again in 2026 to 3.8%, fueled by strong domestic demand supported by ambitious public investment, high foreign direct investment (FDI) inflows, and growing private consumption, the Commission said in its Spring 2025 Economic Forecast.

The country’s growth prospects face downside risks due to weak demand from main trading partners in the euro area and due to a negative impact that the political instability in the country may have on FDI inflows. “Global trade tensions and the looming threat of potential US sanctions against Serbia’s oil industry (NIS) pose further challenges to the growth outlook,” the EC noted.

The Commission also said that Serbia’s inflation is expected to gradually ease to 4.0% beginning in the second half of the year, and move toward the target midpoint thereafter. This slowdown will be supported by lower imported inflation, a projected slowdown in real wage growth, and relatively tight monetary policy.

The general government deficit is projected to widen to 3% of GDP in 2025 from 3% in 2024 and remain at 3% in 2026. The EC projected the country’s government debt-to-GDP ratio to stay at 47.5% in 2025 before inching down to 47.4% in 2026.

In 2024, Serbia’s economy expanded by 3.9%.

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