According to the European Bank for Reconstruction and Development (EBRD), Serbia’s economic growth is expected to accelerate to 3.8% in 2024, up from 2.5% in 2023. This growth is attributed to strong performance in the first half of the year, supported by expansive fiscal and monetary policies that have boosted consumption and capital investments.
In the first half of 2024, Serbia’s economy grew by 4.3% year-on-year, largely driven by positive results in the service sector, particularly in catering, trade, tourism and construction.
However, the current account deficit has doubled compared to the same period in 2023, exceeding €1.2 billion, or 3.3% of GDP. This increase is linked to high import levels, dividend outflows, and reduced state transfer income from abroad. The net inflow of foreign direct investment (FDI) remained stable at €2 billion, while the inflation rate stood at 4.3% in July, slightly above the regional average. The benchmark interest rate was recently lowered twice, from a peak of 6.5% to 6% in July 2024.
The fiscal policy remains expansive, with further increases in pensions and public sector salaries announced for this year.
Looking ahead, Serbia’s economic growth is projected to reach 4% in 2025, although risks such as a tight labor market, geopolitical instability, and adverse weather conditions could impact this forecast. In the broader Western Balkans region, growth is expected to rise from 2.5% in 2023 to 3.4% this year and 3.7% in 2025, driven by investments in Serbia, sustainable consumption in Montenegro, and strong tourism in Albania, according to the EBRD.
