Serbia's Central Bank lowers forecasts - Economy expected to grow by 3% this year. Reason, impact of conflict in Iran
The Central Bank of Serbia (NBS) has lowered the country's economic growth forecast for both 2026 and 2027 due to the further escalation of geopolitical tensions following the outbreak of war in the Middle East.
After expanding by around 2% in 2025, Serbia's economy is expected to grow by 3% in 2026, 0.5 percentage points lower than the central bank's February forecast, the NBS said in a report. Economic growth in 2027 is now forecast at 4.5%, also 0.5 percentage points lower than the forecast made in February.
In the medium term, the central bank expects Serbia's economy to grow at a sustainable pace, broadly in line with its potential of around 3.5% per year. The projected economic growth will be driven by domestic demand, with contributions from both consumption and fixed investment, supported by higher disposable incomes and the implementation of infrastructure projects.
In 2026, imports are expected to grow faster than exports, due to still weak external demand and rising consumption and investment activity, resulting in a negative contribution from net exports. In contrast, in 2027, net exports are expected to make a positive contribution to GDP growth, mainly due to an increase in exports of services related to the organization of the specialized exhibition Expo, the central bank said.
At the same time, the NBS now estimates average annual inflation at 3.6% in 2026 and 4.4% in 2027, up from 3.3% in 2026 and 3.8% in 2027 it forecast in February, with the significant increase in global oil prices as the main factor for the revised inflation path projection.
The central bank expects annual inflation to remain within the 1.5-4.5% target range in the second and third quarters of 2026, before temporarily moving slightly above the upper limit of the target range towards the end of the year and early 2027.
In the first quarter of 2026, Serbia's GDP grew by 3% on an annual basis, accelerating from a 2.2% expansion in the last quarter of 2025.
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