EBRD: Political tensions and world trade crisis pose risks to Serbia’s GDP growth

Downside risks to Serbia’s economic growth stem from ongoing domestic political tensions and potential global trade disruptions, which could constrain exports and inflows of foreign direct investment and weigh on structural reforms, estimates the European Bank for Reconstruction and Development (EBRD).

“Real GDP growth is forecast at 2.5% in 2025, accelerating to 3.3% in 2026 supported by EXPO-related investment,” the EBRD estimates in the report “Regional Economic Prospects – Under Pressure.”

The EBRD says that economic growth moderated to 2% year on year during the first half of 2025, following two years of robust expansion.

The principal drivers of growth were the information and communication services and manufacturing sectors, underpinned by the commencement of the serial production of electrical vehicles and increased tire output, while construction weighed negatively on overall growth.

It is further said that social unrest adversely impacted trade, hospitality and related industries. While household and government consumption continued expanding, investment declined, and net exports were negative.

The European creditor also points out that the current account deficit doubled in the first half of the year and that inflation remained elevated at 4.9% in July 2025.

The Serbia section of the report says that stronger automotive exports and accelerated infrastructure investments could drive growth in the second half of the year.

The EBRD projects a growth of 2.7% and 3.2% on average for this and next year respectively.

EBRD Evropska banka za obnovu i razvoj Beograd

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