Economic growth rate Of Serbia in 2026, due to the war in the Middle East, it will be smaller than planned, economists agree. "Vremen" interlocutors say that the projected three percent growth has changed from realistic to optimistic, but that it will be above average region.
To the slowdown in growth economy Serbia compared to the planned three percent is also indicated by the published analysis of the Quarterly Monitor edition, which will be presented on Friday at the Faculty of Economics.
Last year, the economy of Serbia achieved a modest growth of two percent, while the planned growth of three percent this year is uncertain due to the war on Middle East, it is stated in the analysis and adds that in 2025, Serbia halved the growth rate, which was slower than the average of Central and Eastern Europe.
Investments will become more expensive as part of the Expo
Economist Saša Đogović tells "Vreme" that the planned economic growth of three percent is becoming optimistic in the existing geopolitical circumstances.
"Before the outbreak of the conflict in the Middle East, that planned growth was realistic. Now it is more likely that the rate of economic growth will be below three percent, but it is difficult to say how much, because we do not know how long this geopolitical situation will last," says Đogović.
He warns that any increase in the price of fuel leads to an increase in business costs, thereby losing competitiveness in the market.
"On the other hand, it is certain that the implementation of certain investments will be delayed, because the costs have increased compared to the originally planned. Globally, those investors who wanted to invest will refrain from doing so because of the increased political risk on the international level," says Đogović.
He also estimates that such a situation will certainly increase the price of investments in connection with Expo.
"This would lead to new borrowing, which can be at higher prices, because inflation rises in the wake of the oil shock. That is why central banks initially keep the existing reference interest rates, but if this continues, we can already expect a certain increase in those interest rates next month, which raises borrowing prices on the international market," Đogović points out.
He states that the situation could be rectified in three or four months if the conflict in the Middle East does not continue for too long, but that if the conflict continues in the next two months - rectification will not be possible this year.
Photo: Tanjug/Strahinja AćimovićEXPO 2027
The EXPO 2027 project continues even at the cost of borrowing
Economist Ljubodrag Savić, on the other hand, points out that "there is every chance that Serbia's economic growth will be above the regional average because in the predictions of the Government of Serbia, and especially the President of Serbia, Aleksandar Vučić, the year 2026 is projected as one of the most successful in the past 10 years."
"No one expected that what is happening in the Middle East with unforeseeable consequences will happen. The growth rate will probably be lower than projected, but the state of Serbia, even at the cost of going into debt, will not give up investment activities related to the Expo. Those activities generate a growth rate in a small amount. Therefore, all facilities and activities related to the Expo 2027 will be completed," Savić told "Vreme".
Construction remains a question mark infrastructure, and Savić believes that this construction will not continue at the same pace, so some jobs will be postponed and some will slow down.
"This will lead to a reduction in the projected GDP growth rate. We should expect a reduction in the volume of major infrastructure works financed by the state, because it is impossible to simultaneously reduce excise taxes by 20 percent - and thus reduce the inflow to the budget, and pretend that nothing happened. It is also possible to maintain economic activity, but at the cost of the state taking on a little more debt," says Savić.
He points out that another potential danger for Serbia is the departure of some foreign companies from the country, which should certainly be counted on.
"It is difficult to estimate how many of them will leave, but it will reduce economic activity and it will be difficult to compensate for that," concludes Savić.
The rise in energy prices brings inflation in Serbia
The aforementioned analysis of the Quarterly Monitor edition also states that high energy prices will worsen the trade balance in the long term, while the outflow of income from capital grows faster than income from remittances, which is also expected in the future.
The inflow of foreign direct investments was halved, but the inflow of capital based on loans increased, according to the analysis.
The decrease in foreign direct investments is probably of a more permanent nature, as a consequence of deglobalization and the growth of business costs in Serbia. Inflation is significantly slowed during 2025, largely due to administrative price control, the base inflation at the end of the previous year and at the beginning of this year is increasing, the Quarterly Monitor adds.
The rise in energy prices on the world market will affect the growth of inflation in Serbia, the extent of that impact will depend on how high the prices of energy will remain, the analysis states, adding that the reduction of excise duties, interventions from commodity reserves and administrative price control can temporarily mitigate the impact of the rise in the price of energy on inflation, while in the long term the rise in prices of energy spills over to inflation.
Real journalism costs money, and we will not be bought by tycoons and corporations. Support us with a one-time or monthly donation. The time for it is now!
