Economic growth ebbs in the third quarter of 2025

GDP growth comes in below expectations: According to a flash release, Serbia's GDP increased 2.0% on a year-on-year basis in Q3, following 2.1% growth in the prior quarter, marking the second-weakest reading since Q4 2022 and undershooting market expectations.

Weak domestic demand drives slowdown: Absent a detailed breakdown, monthly data indicates that domestic demand momentum softened: Retail sales growth cooled compared to Q2 in Q3, and wage growth lost momentum in July–August compared to Q2’s average, boding ill for private spending. In addition, industrial activity decelerated, weighed by softer manufacturing growth. Meanwhile, the external sector likely remained a drag on GDP growth as goods exports growth lost momentum in Q3 vs Q2.

Q4 GDP growth to remain tepid: Our Consensus is for economic growth to edge up in Q4, with the country ending the year on much the same footing as at the start. Nonetheless, the outlook for GDP growth next year is brighter, with lower interest rates and infrastructure projects ahead of Expo 2027 Belgrade spurring private spending and fixed investment. Still, U.S. sanctions on oil company NIS, which came into effect in early October, will weigh on the outlook. The process of finding a buyer for Russia’s stake in NIS is key to monitor.

Panelist insight: Commenting on the outlook, Erste Bank’s Mate Jelic noted: “It is clear that Serbia is currently going through a difficult period due to multiple shocks. The focus of the government is on dealing with the situation regarding NIS, as the company is vital for the economy. We see risks that a prolonged period of uncertainty could lead to a delay in investments and weigh on overall investor and business sentiment.”

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Serbian private consumption projections for the next ten years from a panel of 14 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable private consumption forecast available for Serbian private consumption.

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