End-of-Mission press releases present IMF staff's preliminary findings following a visit to a country. The views expressed in this statement are those of staff and do not reflect those of the IMF Executive Board. Based on the preliminary findings, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision about the completion of review.
- IMF staff and the Serbian authorities have reached staff-level agreement on the Second Review under the Fund's Policy Coordination Instrument (PCI) subject to approval by the IMF Executive Board.
- Growth has slowed as the economy has been buffeted by global trade tensions, protests, political uncertainty, and sanctions on the oil company, NIS. Poor agricultural harvests reignited food price pressures, but headline inflation eased in September, reflecting temporary price and margin controls on food and household essentials.
- Serbia's macroeconomic resilience positions the economy well for a rebound of growth once temporary shocks subside. Household spending remains supported by continued gains in disposable income, the banking sector is resilient, foreign exchange reserves are ample, and public debt is low.
- The authorities remain committed to maintaining a fiscal deficit ceiling of 3.0 percent of GDP during 2025-27 and to the special fiscal rules on public wages and pensions. The PCI supports the authorities' efforts to advance fiscal-structural and energy sector reforms.
Belgrade, Serbia: An International Monetary Fund (IMF) mission, led by Ms. Annette Kyobe, visited Belgrade during October 22–30, 2025 to conduct discussions on the Second Review under the Policy Coordination Instrument (PCI). At the end of the discussions, the mission issued the following statement:
"Economic activity has slowed amid both external and domestic challenges. Growth in 2025 is projected at 2.1 percent, reflecting weaker public investment, lower FDI inflows, and weaker consumption. After temporarily rising above the upper bound of the NBS's tolerance band due to higher food prices from poor harvests, headline inflation eased to 2.9 percent in September, reflecting price and margin controls on food and household essentials.
Growth is projected to recover to 3 percent in 2026 on continued gains in household disposable income, supportive credit conditions, new manufacturing export capacities, and the resolution of NIS-related energy supply uncertainty. Inflation in 2026 is likely to rise moderately. The current account deficit is projected to widen to around 6 percent of GDP before moderating, and foreign exchange reserves are expected to remain at comfortable levels.
Risks to the outlook are on the downside. A protracted resolution of NIS and domestic political tensions could weaken economic activity. The risks are cushioned by significant fiscal and external buffers, including high foreign exchange reserves and government deposits, a resilient banking sector and moderate public debt.
Maintaining prudent macroeconomic policy is essential to safeguarding credibility while preserving policy space to respond to shocks. The 3.0 percent of GDP ceiling on fiscal deficits—striking an appropriate balance between current spending needs and investments—is a fundamental policy anchor.
The authorities are strengthening public investment management, with further gains achievable through enhanced cost-benefit analyses, fiscal risk assessments, and stronger procurement practices. The authorities are also committed to improving fiscal transparency and are making good progress toward completing Serbia's first tax expenditure report, conducting an actuarial study of the pension system, and publishing additional fiscal data related to mineral resources, state-owned enterprises (SOEs), and municipal finances.
Energy sector reforms are progressing, but further efforts are needed to secure the financial sustainability and operational efficiency of energy SOEs. Serbia is pursuing a range of critical energy investments, and given the sector's significant financing needs, prioritizing the most cost-effective projects will be key to strengthening both economic performance and energy security.
The current monetary policy stance remains appropriate and continues to underpin Serbia's macroeconomic stability, including by looking through temporary price fluctuations. As the effects of price and margin controls are expected to dissipate over time, the authorities should stay vigilant to potential upside inflation risks.
The mission welcomed the authorities' intention to phase out the price and margin controls as planned, by end-February. The authorities are committed to resolving the sanctions on NIS in a way that ensures uninterrupted petroleum supply in Serbia.
The IMF team would like to thank all their counterparts for their hospitality and open and constructive discussions."
