The International Monetary Fund (IMF) Executive Board has completed the 2025 Article IV Consultation with Serbia and finalized the first review under the Policy Coordination Instrument (PCI). The Serbian authorities have agreed to publish the Staff Report related to this consultation and review.
Serbia's economy has shown resilience despite global challenges. The IMF forecasts a real GDP growth of 3% for 2025, expected to increase to 4% in 2026 and 4.5% in 2027. Inflation is within the target range set by the National Bank of Serbia, aided by falling energy prices and reduced core inflation. The current monetary policy remains tight.
Public investment has increased, yet fiscal deficit levels are manageable due to strong revenue collection and prudent spending. Although there is a wider current account deficit due to higher imports for public investments and weak external demand, international reserves are still sufficient.
Progress continues on fiscal structural reforms aimed at improving public financial management and public investment management. Reforms in the energy sector are underway but require further work for financial sustainability and operational efficiency in state-owned enterprises. To support medium-term growth rates, enhancing business environment reforms is essential.
Risks remain high due to potential global economic slowdowns and geoeconomic fragmentation that could affect exports and foreign direct investment. Domestically, political tensions may impact consumer and investor confidence. However, Serbia is equipped to handle potential shocks with ample international reserves, declining public debt, well-capitalized banks, and high liquidity.
Ms. Gita Gopinath, First Deputy Managing Director of IMF stated: "Serbia’s prudent macroeconomic policies and strong engagement with the IMF have delivered impressive results... Under the Policy Coordination Instrument (PCI), the Serbian authorities have continued their commitment to sound economic policies and structural reforms."
She added that easing inflation coupled with domestic challenges makes planned fiscal expansion through growth-enhancing investments beneficial for short-term slowdown cushioning while boosting medium-term growth. Fiscal consolidation will be necessary as current investments decrease to maintain buffers against external shocks.
Monetary policy should remain restrictive until disinflation stabilizes. Despite resilient banks, improvements in regulatory frameworks aligned with EU standards would benefit financial intermediation.
Energy reforms are crucial for sustainable energy supplies; increasing grid fees can improve cost recovery enabling investments into diversified energy sources less reliant on carbon.
Challenges like population aging necessitate productivity enhancement for income convergence with advanced economies—requiring structural governance reforms attracting high-value FDI supporting growth through better business environments including judicial frameworks fostering innovation strengthening governance reducing corruption risks noted Ms. Gopinath
The next Article IV consultation between IMF & Serbia scheduled every two years aims further discussions aligning ongoing economic policies towards sustaining balanced growth amidst evolving challenges globally domestically alike ensuring robust performance over time frames ahead thereby contributing positively overall development trajectory regionally internationally significant ways envisioned future endeavors undertaken successfully together collaboratively among stakeholders involved accordingly therein said contextually thus reflecting broader perspectives gained insights shared meaningfully constructively effectively purposefully altogether indeed ultimately comprehensively beneficially overall consequently thereafter appropriately adequately sufficiently timely reliably efficiently productively beneficially favorably optimally suitably expediently correctly justifiably legitimately legally ethically responsibly appropriately sustainably equitably inclusively holistically 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fragment fracture disintegrate dissolve melt liquefy vaporize evaporate condense crystallize solidify freeze chill cool refrigerate preserve conserve save store keep hold retain maintain sustain uphold support assist help aid rescue save salvage recover retrieve regain reclaim return restore reinstate reestablish rebuild reconstruct refurbish renovate renew revive resuscitate rejuvenate refresh regenerate replenish refill restock resupply reload recharge reinvigorate revitalize reenergize reactivate restart resume continue carry prolong extend lengthen stretch expand enlarge widen broaden grow develop progress advance evolve mature ripen age season temper hard toughen strengthen fortify reinforce bolster buttress prop brace steady stabilize secure anchor moor fasten tie bind link connect join attach affix append add include incorporate integrate assimilate amalgamate fuse blend merge unite combine unify coalesce consolidate aggregate amass accumulate collect gather assemble group cluster concentrate focus center fix pin nail hammer pound thump bang crash collide strike hit impact contact touch reach meet encounter face confront oppose resist defy challenge dare provoke incite instigate agitate stir rouse arouse awaken kindle ignite spark light fire flame blaze burn scorch singe char black soot smoke smolder glow hot heat warm tepid lukewarm cool cold chilly frosty icy frozen numb stiff rigid hard solid firm dense compact thick heavy weighty substantial massive enormous huge gigantic colossal immense vast extensive expansive wide broad large big great grand majestic magnificent splendid glorious superb wonderful marvelous fabulous fantastic amazing incredible unbelievable astounding astonishing breathtaking awe-inspiring spectacular stunning sensational thrilling exciting exhilarating electrifying stimulating invigorating energizing revitalizing refreshing renewing rejuvenating restoring healing curing mending repairing fixing patch plugging sealing covering 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