Allianz Trade reports Serbia’s economy growth by 3.5-4% in 2026-2027

A global trade credit insurer Allianz Trade expects Serbia’s economic growth to quicken to 3.5-4% in 2026 and 2027, compared to an estimated 2.1% increase in 2025.
As Allianz Trade said in its annual research Country Risk Atlas 2026 published on Monday, wage growth and easing inflation should help private consumption remain resilient. Nevertheless, tighter labor market conditions and slowing productivity gains may cap momentum. Public investment is still acting as a short-term growth anchor, yet its net domestic spillovers import-intensive nature is reduced.
Also, strategic infrastructure and energy projects ahead of the EXPO 2027 support Serbia’s medium-term growth potential. This international exhibition to be held in Belgrade has also links with the country’s diversification efforts.
Allianz Trade expects inflation to remain within target and to allow for cautious monetary easing, despite the renewed food or energy price shocks that could reintroduce volatility. They also add that external demand remains a mild drag, given weak performance of Serbia’s key European partners.
A six-month cap on retail margins on staples and basic goods at 20% was imposed the Serbian government in September aiming to ease inflation pressures. It resulted in slowing annual consumer price inflation gradually to 2.7% in December from August’s 4.7%. The central bank expects annual inflation to remain within the 1.5-4.5% target range in the short term.
As Allianz Trade noted, Serbia’s cyclical risks are manageable. Nevertheless, they could tilt to the downside if global financial conditions tighten or domestic confidence weakens ahead of key political milestones. Meanwhile, improved market credibility, declining public debt and continued access to domestic and international funding can benefit the financing profile of the country. Also, investor appetite for dinar- and euro-denominated debt supports this tendency.
Despite a good capitalization of the banking sector, tightening credit terms annoy smaller firms and households. Also, sustained FDI inflows to offset import-heavy investment cause the current account deficit.
Politically speaking, balancing between hopes for EU accession and close ties with Russia and China define Serbia’s foreign policy. This position “adds strategic ambiguity, exposing the country to shifting external pressures”. Additionally, episodic security and diplomatic risks arise from unresolved tensions with Kosovo.
Meanwhile, prolonged protest against incumbent politicians with increasing medium-term succession and institutional risks dominate domestic politics. According to Allianz Trade, it creates public opposition to mining and energy projects, especially lithium. This protest might intensify social unrest and delay strategic investments.

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