EY Macroeconomic Pulse: Serbia & regional highlights

EY Serbia has released the June 2026 edition of its flagship report – Macroeconomic Pulse – providing insights into current macroeconomic trends, risks, and outlook in Serbia and the broader region.

EY Serbia has prepared a new edition of its flagship Macroeconomic Pulse, providing an in-depth view of recent macroeconomic developments and the outlook for Serbia and the Western Balkans region.

The Macroeconomic Pulse highlights that Serbia’s growth remains relatively resilient in early 2026, despite an increasingly challenging global backdrop. However, the composition of growth continues to raise concerns. Economic activity is predominantly driven by strong household consumption, supported by elevated wage growth and expanding consumer lending, alongside intensifying public investment activity. At the same time, private investment and FDI inflows have weakened significantly, while export performance is deteriorating. Subdued external demand, coupled with rising labor and energy costs, continues to erode Serbia’s external competitiveness and weigh on export-oriented sectors.

These dynamics are not unique to Serbia. Similar patterns are increasingly visible across the Western Balkans, including Bosnia and Herzegovina, Montenegro, and North Macedonia, where growth is also becoming more reliant on domestic demand, particularly consumption and public spending, amid weakened external conditions.

Looking ahead, we expect growth in Serbia and the region to stabilize at moderate levels in the range of 2–3% in the short to mid term horizon. While domestic demand will likely continue to support economic activity, rising geopolitical uncertainty, persistent inflationary pressures, weaker capital inflows, and continued competitiveness challenges represent key risks to the sustainability of the growth model.