Serbia: Economic and Political Overview
The economy of Serbia experienced rapid growth from 2001–2008, although the global financial crisis hit hard on the country’s economy, showing its structural weaknesses and the need for a full transition to a market economy. Despite turning into negative territory in 2020 as a consequence of the COVID-19 crisis, Serbia’s GDP rebounded strongly in 2021 (+7.4%) and continued its positive trend in 2022 and 2023 (+2.3% and +2.5%, respectively). The country’s real GDP grew by 3.9% in 2024, making it Europe's second-fastest-growing economy after Malta, according to the Serbian Chamber of Commerce and Industry, thanks to a better-than-expected performance of the construction and services sectors. According to the World Bank, Serbia's economy is projected to grow by around 4% in the medium term, driven mainly by consumption and partly by investment. Risks include potential negative impacts of climate change on agriculture and infrastructure.
Serbia's consolidated budget deficit expanded to SRD 191.860 billion (EUR 1.64 billion) in 2024, up from SRD 181.095 billion the previous year, according to the Ministry of Finance. Budget revenue increased by a real 8.5% to SRD 3.941 trillion, while expenditures grew by 8.1% to SRD 4.133 trillion. Tax revenue rose by 8.6% in real terms to SRD 3.497 trillion, while non-tax revenue increased by 14.7% to SRD 422 billion. Current expenditures grew by 8.1% to SRD 3.379 trillion, while capital expenditures surged by 18.5% to SRD 704.65 billion. Looking ahead, the fiscal deficit is now expected to increase, as the government has effectively suspended fiscal rules until 2029 to support large-scale public infrastructure spending. Serbia's public debt-to-GDP ratio declined to 47.4% by December 2024, down from 48% at the end of 2023, according to the finance ministry. In absolute terms, public debt rose to EUR 38.874 billion (USD 40.128 billion) by the end of 2024, up from EUR 36.153 billion the previous year. Over the forecast horizon, debt reduction will be supported by robust nominal GDP growth and primary deficits averaging 0.4%. In 2024, consumer prices rose by an average of 4.6% compared to 2023, according to the statistical office, and are expected to decrease gradually and remain within the NBS target range. Meanwhile, negotiations for EU membership continued: as of December 2024, Serbia has opened 22 negotiation chapters, with progress varying across different sectors. However, Serbia's accession process faces challenges, notably its stance on Russia and the normalization of relations with Kosovo. In November 2024, Hungary's proposal to advance Serbia's accession talks was blocked due to disagreements, including Serbia's refusal to impose sanctions on Russia. Additionally, Serbia's lack of progress in areas like good governance, rule of law, and alignment with EU foreign policy standards has impeded its EU accession path.
Serbia's unemployment rate, relatively low compared to its neighbours in the Balkans, remains significantly higher than the European average: in 2024, it stood at 9.1%, with a marginal decrease expected in the next couple of years (8.9% by 2026 as per the IMF projections). In 2024, Serbia's average net monthly wage rose by 9.1% in real terms and 14.1% in nominal terms, reaching SRD 98,143 (USD 878 / EUR 838), according to the statistical office. The standard of living of the Serbian population remains significantly below the EU average and the country's informal sector is substantial. However, the authorities have the support of the EU and international financial institutions to modernize infrastructure and support investment in the business community. The World Bank estimates that the incidence of poverty declined to an estimated 6.9% in 2023 (latest data available), while the GDP per capita (PPP) stood at USD 29,038 in 2024 (IMF).
| Main Indicators | 2023 (E) | 2024 (E) | 2025 (E) | 2026 (E) | 2027 (E) |
| GDP (billions USD) | 75.19 | 82.55 | 88.63 | 95.36 | 102.20 |
| GDP (Constant Prices, Annual % Change) | 2.5 | 3.9 | 4.1 | 4.0 | 4.0 |
| GDP per Capita (USD) | 11,352 | 12,514 | 13,490 | 14,572 | 15,681 |
| General Government Balance (in % of GDP) | -1.4 | -2.3 | -2.1 | -2.0 | -2.1 |
| General Government Gross Debt (in % of GDP) | 48.9 | 48.6 | 47.4 | 46.2 | 46.3 |
| Inflation Rate (%) | 12.4 | 4.5 | 3.6 | 3.1 | 3.0 |
| Unemployment Rate (% of the Labour Force) | 9.4 | 9.1 | 9.0 | 8.9 | 8.9 |
| Current Account (billions USD) | -1.96 | -3.48 | -4.28 | -4.89 | -5.30 |
| Current Account (in % of GDP) | -2.6 | -4.2 | -4.8 | -5.1 | -5.2 |
Source: IMF – World Economic Outlook Database, October 2021
Serbia has a workforce of 3.24 million out of its 6.62 million population. The agricultural sector accounts for 3.8% of the country's GDP (its share has been decreasing in the past years), employing nearly 19.2% of the workforce (World Bank, latest data available). Serbia has 3.4 million hectares of agricultural land. Its continental climate with cold winters and hot humid summers is ideal for intensive fruit production. Fruit production consists mainly of apples, grapes, plums, peaches, pears, and berries. Recently, Serbia has been widely using fruit processing to obtain products like brandies, jams, juices, and compotes. The main crops are maize and wheat, together with barley, oats, and rye. Figures from the National Statistical Office show that the physical volume of agricultural production fell by 8.8% on the year in 2024.
Serbia has significant quantities of coal, lead, zinc, copper, and gold, but the lack of investment, which has affected the mining sector for several years, prevents the country's economy from benefiting from this wealth. The industrial sector is likewise in need of modernization and foreign investment, currently contributing nearly one-fourth of the country's GDP and employing 28.2% of the workforce. The country’s main industries include automotive, food processing, chemicals, base metals, furniture, pharmaceuticals, machinery, sugar, tyres, and clothing. The manufacturing sector is estimated to account for 13% of GDP. According to the National Statistical Institute, Serbia's industrial production increased by 3% year-on-year in 2024, while manufacturing grew by 4.4%.
Services make up the main sector of activity and account for 57.6% of Serbia's GDP, employing 52.6% of the workforce. The IT industry is one of the fastest-growing, the same as for the tourist sector: the number of foreign tourists who visited Serbia in 2024 grew by 11.7% to 2.38 million, while that of overnight stays spent by foreign tourists increased by 9.2%. In the same year, retail trade turnover increased by 5.9%, while wholesale trade turnover rose by 5% in nominal terms (Statistical Office of the Republic of Serbia). Concerning the banking sector, there were 20 banks active in Serbia at the end of 2023: 15 were majority-owned by foreign shareholders, three by private domestic investors, and two by the state. Among foreign-owned banks, the largest asset shares were held by Italy (26.3%), Austria (19.4%), Hungary (13.9%), and Slovenia (9.9%), with other countries accounting for 7.3% (European Banking Federation, latest data available).
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 19.2 | 28.2 | 52.6 |
| Value Added (in % of GDP) | 3.8 | 24.0 | 57.6 |
| Value Added (Annual % Change) | 7.4 | 3.7 | 5.1 |
Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.
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The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024
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