IMF cuts Serbia’s economic growth forecast to 2.8% amid rising inflation

In the World Economic Outlook (WEO) published yesterday, the International Monetary Fund (IMF) lowered its global economic growth forecast from the January estimate of 3.3% to 3.1%.

The IMF also reduced its estimate of Serbia’s economic growth to 2.8% in 2026, while in the October outlook last year, the projection was that Serbia’s GDP would grow by 3.6% in 2026, which was corrected to three percent in January.

In 2025, economic growth was 2.8%.

Also, the expectations are that the average inflation in 2026 in Serbia will be 5.2%. In March, annual inflation was 2.8%, and the NBS is targeting inflation in the corridor of 1.5 to 4.5 percent.

Globally, the forecast for 2026 has been revised down by 0.2 percentage points, while that for 2027 is unchanged from the January 2026 WEO update. Global headline inflation is expected to rise to 4.4% in 2026 and return to 3.7% in 2027, due to the war in the Middle East.

If not for the war, global growth would have been revised up, the Fund said in its report. Forecasts based on pre-conflict assumptions would show a slight increase in growth for 2026 compared to January, by 0.1 percentage point, to 3.4%.

– The downward revision to 2026 largely reflects the disruptions caused by the conflict in the Middle East, partially mitigated by recent strong data and reduced tariff rates – the World Economic Outlook 2026 says.

– Given the real-time difficulties in establishing a consistent set of assumptions for the projections, this World Economic Outlook (WEO) report presents a “reference forecast” — rather than a traditional baseline — based on the assumption that the war will be of limited duration, intensity, and scope, such that the disruptions will subside by mid-2026, consistent with commodity futures prices as of March 10. However, given the evolving situation, the report supplements the global reference forecast with scenarios in which the conflict lasts longer or spreads. The likelihood of these scenarios occurring increases as hostilities and related disruptions continue – the Fund says.

In an adverse scenario with higher and more sustained increases in energy prices, global growth would slow further to 2.5% in 2026, and inflation would reach 5.4%. In an even more severe scenario, with greater damage to energy infrastructure in the conflict region, the impact would be even greater: global growth would fall to around 2% in 2026, while inflation would be just above 6% by 2027. The impact on developing economies would be almost twice as large as on developed countries.

They point out that geopolitical tensions could further worsen, turning the situation into the largest energy crisis of modern times, but domestic political tensions could also erupt.

Regardless of geopolitics, trade disputes could escalate again, they estimate.

Međunarodni monetarni fond-MMF Beograd

Narodna banka Srbije Beograd

International Monetary Fund

IMF

NBS

National Bank of Serbia

World Economic Outlook

economic growth of Serbia

outlook for GDP of Serbia in 2026

global economic growth

inflation in Serbia

global inflation