Page 58 - bne IntelliNews Southeastern Europe Outlook 2025

3.10 External Environment – Serbia
Serbia's external position has strengthened markedly over the past decade, driven by robust FDI and deeper integration into European supply chains.
In 2025, the country is expected to maintain its export-led growth trajectory, supported by a diverse range of goods exports, including electrical machinery, base metals and vehicles, alongside rapidly expanding services exports, particularly in the ICT sector.
In 2024, the European Union solidified its position as Serbia’s largest trading partner, accounting for approximately 60% of the country’s total trade. Germany remained Serbia’s most significant bilateral partner, with €2.1bn in goods exported and €2.5bn imported in the first half of the year. Trade with the Central European Free Trade Agreement (CEFTA) countries also performed strongly, with a surplus of €2.14bn recorded during the first nine months.
A major development in 2024 was the implementation of a free trade agreement (FTA) with China, which provided Serbian producers access to over 20,000 product categories in the Chinese market. This agreement is expected to further strengthen bilateral trade ties, positioning China as a critical partner alongside the EU. In contrast, Russia’s role as a trading partner continued to weaken, with declining oil and gas imports reducing its traditional importance in Serbia’s trade portfolio.
Looking ahead to 2025, Serbia’s export potential will continue to benefit from strong FDI inflows, which reached €4.467bn by November 2024, nearly matching the previous year’s total. These investments will support the expansion of export-oriented industries, particularly in manufacturing. The ICT sector will remain a cornerstone of Serbia’s export growth, driven by its competitive regional position.
While the EU will continue to be Serbia’s largest trading bloc, trade with China is anticipated to grow in importance, helping to reduce the country’s reliance on EU markets. This diversification will be critical as the EU faces sluggish economic growth. Trade with CEFTA countries is expected to remain strong, contributing to Serbia’s overall trade balance.
Serbia’s trade deficit, which widened by 20% in the first nine months of 2024 to reach €6.836bn, is expected to expand further in 2025. This increase will be driven by rising imports associated with large-scale infrastructure and defence investments. While this poses short-term challenges, these expenditures will enhance Serbia’s long-term economic competitiveness and modernisation.
The Serbian dinar is likely to remain stable against the euro in 2025, with the National Bank of Serbia (NBS) maintaining its policy of active intervention. Record foreign-exchange reserves, equivalent to seven months of import cover, will provide a buffer against external shocks.
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