AGP Executive Report

Labour Market: Serbian wages are rising faster than productivity, widening the competitiveness gap with EU workers. Employment has stagnated for three years, with industry jobs down 3.3% year on year and the workforce shrinking as more people retire than enter the labour market. Growth and Trade: Serbia’s real GDP grew 3.6% in the first eight months of 2026, while January–August foreign trade reached €52.51 billion. Monetary Policy: The central bank held its key rate at 5.75%. Air Travel: Air Serbia carried a record 1,737,977 passengers in the third quarter. Energy Security: Serbia has fuel reserves for 51 days, below the 90-day requirement.

Trade: Serbia’s trade with Italy exceeded €5 billion in 2025, then reached about €3 billion in the first half of 2026 — up 32% year on year. Serbia’s total external trade stood at €52.51 billion in January-August. Aviation: Air Serbia carried a record 1,737,977 passengers in the third quarter. Growth and Rates: Serbia’s real GDP grew 3.6% in the first eight months, while the central bank held its key rate at 5.75%. The economy is forecast to grow 3.1% in 2026 and 3.7% in 2027. Energy Security: Serbia has fuel reserves for 51 days, below the 90-day requirement.

Digital Services: A drone strike shut down a Yandex data center in Russia on Sunday, disrupting taxi bookings and driver apps in Serbia and several other countries. Air Travel: Air Serbia carried a record 1,737,977 passengers in the third quarter, marking a strong result for the national carrier. Trade: Serbia’s goods trade reached €52.51 billion in January–August. Italy reported bilateral trade of about €3 billion in the first half of 2026, up 32% year on year. Monetary Policy: The National Bank of Serbia kept its key interest rate at 5.75%. Growth Outlook: Serbia’s economy is forecast to grow 3.1% in 2026 and 3.7% in 2027.

Italy-Serbia Trade: Bilateral trade exceeded €5 billion in 2025 and reached about €3 billion in the first half of 2026, up 32% year on year, figures shared at a Belgrade event marking the Italian Trade Agency’s centenary. Interest Rates: Serbia’s central bank kept its key rate at 5.75%. Air Travel: Air Serbia reported a record third-quarter 1.74 million passengers. Economic Outlook: Serbia’s January–August external trade totalled €52.51 billion, while economic growth is forecast to accelerate to 3.1% in 2026 and 3.7% in 2027.

Monetary Policy: Serbia’s central bank kept its benchmark rate at 5.75%, citing inflation risks. It expects economic growth of at least 3.2% this year and around 4.5% in 2027. Air Travel: Air Serbia carried a record 1.74 million passengers in the third quarter, up 6.5% year on year; passenger numbers for the first nine months rose 5.8% to 3.8 million. Trade: Serbia’s goods trade reached €52.51 billion in January–August. Technology Investment: Belgrade-based Mercury.AI says it plans to open a 17,000-square-metre security camera factory in Serbia in 2027, with annual capacity of 7.2 million devices. Wine Business: Twelve Bulgarian wineries are presenting their products in Belgrade ahead of Wine Vision by Open Balkan, which runs through October 12 and draws international corporate buyers.

Monetary Policy: Serbia’s central bank kept its key rate at 5.75%, citing inflation and global risks. Inflation reached 2.2% in August, and the bank expects growth of at least 3.2% this year and about 4.5% in 2027. Aviation: Air Serbia carried a record 1.74 million passengers in the third quarter; passenger numbers for the first nine months rose 5.8% year on year to 3.8 million. Technology and Investment: Belgrade-based Mercury.AI won a Zagreb award for its city security system and says it plans to open a 17,000-square-metre camera factory in Serbia in 2027, with annual capacity of 7.2 million devices. Trade: Serbia’s goods trade totalled €52.51 billion in January–August. Growth Outlook: A separate forecast sees the economy expanding 3.1% in 2026 and 3.7% in 2027.

Trade and Growth: Serbia’s January–August foreign trade reached €52.51 billion, while forecasts put economic growth at 3.1% this year and 3.7% in 2027. Energy Security: Serbia has fuel reserves for 51 days, below the 90-day requirement; work on a gas interconnector with North Macedonia is due to start next week. EXPO 2027: The project has become a flashpoint ahead of the October 25 election, with the opposition pledging to halt it and the ruling SNS defending it as a source of investment, jobs and infrastructure upgrades. Local Supply: Serbian grower Zeleni Hit expects to deliver about 250,000 kilos and pieces of pesticide-residue-free produce to Lidl by season’s end, nearly three times its initial volume. Regional Ties: Serbian officials in Baku discussed advancing economic and energy cooperation with Azerbaijan.

Public Finances: Unofficial figures put Serbia’s September budget deficit at RSD106.2 billion, taking the nine-month shortfall to RSD204.6 billion (€1.74 billion)—2.7 times last year’s level. Spending rose 65.6% year on year; official September figures are due in November. Trade & Growth: Foreign trade totalled €52.51 billion in January–August. Serbia’s economy is forecast to grow 3.1% this year and 3.7% in 2027, while public debt stood at €41.93 billion at end-August. EXPO & Investment: EXPO 2027 has become a campaign flashpoint, with opposition figures vowing to halt the project and scrutinise contracts; the government says it will bring investment, jobs and infrastructure upgrades. Industry & Logistics: Car exports reached about €2.8 billion in the first half, largely driven by Stellantis, and Austrian Post completed its acquisition of Serbian parcel firm D Express. Serbia also has fuel reserves for 51 days, below the 90-day requirement.

Currency: The dinar was nearly unchanged at RSD 117.3750 per euro on Thursday, while its indicative rate fell to RSD 104.9678 per dollar. Trade: Serbia’s goods trade reached €52.51 billion in January–August, up 6.4% year on year. Exports rose faster than imports, narrowing the deficit by 11.3% to €5.1 billion. Public finances: Public debt stood at €41.93 billion at the end of August, or 43.3% of GDP, up €89 million from July. Growth and investment: Serbia’s economy is forecast to grow 3.1% in 2026 and 3.7% in 2027. President Aleksandar Vučić also announced plans for a Belgrade–Vršac–Timișoara highway, citing investor interest in Pančevo. Energy security: Serbia has fuel reserves for 51 days, below the 90-day requirement. Work on the gas interconnector with North Macedonia is set to begin next week.

Trade: Serbia’s goods trade reached €52.51 billion in January–August, up 6.4% year on year. Exports rose 8.8% to €23.7 billion, imports increased 4.6% to €28.8 billion, and the deficit narrowed 11.3% to €5.1 billion. Energy Security: Serbia and its regional partners agreed to deepen gas cooperation, with construction of the Serbia–North Macedonia interconnector due to start next week. The link is targeted for completion in early 2028 and would connect Serbia to gas supplies routed through Greece; regional fuel reserves remain below the 90-day requirement, covering 51 days in Serbia. Public Finances: Serbia’s public debt stood at €41.93 billion at the end of August, or 43.3% of GDP, up €89 million from July. Infrastructure: The first 11 km of an 18.3-km rail line linking Belgrade with Nikola Tesla Airport and the National Stadium is complete. The service is expected to begin in March or April 2027 and carry about 10,000 passengers daily. Growth Outlook: Serbia’s economy is forecast to grow 3.1% in 2026 and 3.7% in 2027.

Kosovo Politics: Kosovo lawmakers elected economist Justina Široka Pula as president in a late-night vote, narrowly avoiding a snap election after MPs agreed on the nominee and tied the move to a deal over limiting the powers of the Hague war-crimes court. Anti-Corruption & Media: A new Serbia-focused probe into President Vučić’s “Who are you?” portal examines how citizens’ reports are handled and where institutional accountability meets election politics. Bosnia Energy & US Influence: US lawmakers raised questions over a Bosnia gas pipeline deal linked to a small US firm tied to Trump associates, arguing sanctions relief could empower allies and reshape regional energy leverage. UAE–EAEU Trade: The UAE’s economic partnership agreement with the Eurasian Economic Union entered into force, cutting tariffs across most product lines and aiming to boost bilateral trade by billions. Serbia Economy Outlook: The World Bank projects Serbia’s growth to accelerate to 3.1% in 2026 and 3.7% in 2027, citing public investment, tourism, wages, and resilient exports. Energy Connectivity: Greece, Serbia, Bulgaria and North Macedonia agreed to strengthen regional energy links, including the Vertical Gas Corridor and a possible oil-products route via Thessaloniki–Skopje–Niš. AI in Supply Chains: Log-hub’s CEO says AI is shifting supply-chain analytics toward clearer business questions and supervision rather than specialist-only software skills. Construction & Jobs: Germany’s reduced work-permit quota is sparking concern, but Serbia’s chamber of commerce argues demand for construction workers should stay strong, especially with Expo 2027.

Serbia’s Growth Outlook: The World Bank expects Serbia’s economy to accelerate to 3.1% in 2026 and 3.7% in 2027, driven by public investment, tourism, higher household incomes and resilient exports. Energy Infrastructure: Serbia will start laying pipes for a gas interconnector with North Macedonia next week, aiming for completion by Q1 2028, while the Greece–North Macedonia link is expected to be operational in 2027. EU Enlargement Rules: The European Commission proposes a longer “probation” for new members, including possible suspension of voting rights and tighter safeguards for rule-of-law and commitments. Parcel Logistics Deal: Austrian Post completed its acquisition of 100% of Serbia’s D Express, moving toward phased integration with City Express. Elections & Media Pressure: Serbia’s electoral commission approved 19 lists for the Oct. 25 early polls, as reporting highlights intensifying pressure on independent media ahead of voting. Banking & FX: The dinar’s official median rate is 117.4601 RSD per euro. Work & Wages: Germany’s reduced work-permit quota from January is raising concern among Western Balkan workers, but Serbia’s chamber says demand for skilled construction labour could keep wages strong. Spyware Case: Student activist Jelena Kontić filed a criminal complaint over alleged Pegasus spyware infection.

EU Enlargement Watch: The European Commission is set to present its pre-enlargement strategy on Oct. 6, with debates ahead of an Oct. 15-16 summit and a key focus on how candidate countries would be treated if “diluted” membership rules apply. Serbia’s EU Deadline: Serbia may need to adopt an AI law to unlock Western Balkans Growth Plan money, but critics say the working draft omits sensitive issues like rule of law, independent institutions and rights safeguards. Energy & Diplomacy: Serbia’s public debt rose to 41.93 bln euros by end-August; meanwhile, energy ministers from Serbia, Bulgaria, Greece and North Macedonia meet in Belgrade to push supply diversification and regional gas/electricity connectivity. Foreign Ties: Marko Đurić met UAE officials, highlighting a strategic partnership and energy investment cooperation. Work Migration: Germany plans to cut Western Balkans work-visa approvals from 50,000 to 25,000 from Jan 1, 2027—raising alarms for Serbia-linked labour flows and construction staffing. Tech & Business: LG will supply an integrated cockpit solution for Renault’s first mass-produced SDV commercial vehicle, while Serbia’s chamber urges startups to apply for GITEX AI Belgrade via the SEE 100 programme.

Public Finance: Serbia’s public debt rose to €41.93bn at end-August, up from €39.34bn at end-2025, with the debt-to-GDP share easing to 43.3%. Energy Diplomacy: Serbia, Bulgaria, Greece and North Macedonia will meet in Belgrade on Oct. 6 to push regional energy security, gas/electricity interconnections and renewables investment. Gas Infrastructure: Bulgaria says Greece–Bulgaria gas transmission capacity is up ~30% this year to 93 GWh/day, with the corridor aimed at eventually feeding Serbia and beyond. Work Migration: Germany plans to cut Western Balkans work approvals from 50,000 to 25,000 from Jan. 1, 2027, raising alarms for Serbia-linked labour flows and construction staffing. Energy Poverty: OECD data show 38% of Albanian households can’t keep homes warm (Kosovo also among the worst), while Serbia sits at 9.5%. Digital Business: Online selling is rising in the region: 27% of Serbian firms sell online, while Albania hits 26%. Tech & Startups: PKS urges startups to apply for the SEE 100 programme ahead of GITEX AI Belgrade during EXPO 2027. Media & Governance: RTS workers protest alleged editorial leadership choices and demand a new public call for REM council nominations. Surveillance Claims: Student Petar Živković says police have been following and recording him for months, linking it to concerns over surveillance tools.

Spectrum & TV Market: Serbia’s telecom regulator RATEL picked “Emisiona tehnika i veze” to run the 470–694 MHz band, awarding it all three digital terrestrial TV multiplexes (MUX1, MUX2, MUX5), with individual licenses to follow after fees and spectrum rules. Digital Infrastructure for EXPO 2027: Telekom Srbija Group is laying city-scale telecom networks at the Belgrade EXPO site, already delivering 14+ km of ducting, 46+ km of fibre and 35 radio access sites. AI & Public Sector Tech: PM Djuro Macut says digitization is key for modern public administration and met Oracle on digital transformation; meanwhile, Serbia’s AI diplomacy (including a U.S. AI initiative) is drawing political debate. Energy & Industry Deals: SOCAR and Serbian partners signed up for a 500 MW power plant project in Niš, adding to the week’s push for new generation capacity. Media Freedom: ANEM warns Adria News Network management is trying to tighten control over Nova.rs by hiring journalists from pro-government outlets ahead of elections. Regional Watch (Bosnia): Bosnia’s election saw low turnout (~41.5%) and strong ethnic-party dominance, with SNSD leading in Republika Srpska as results continue to firm up.

Bosnia Election Watch: Polls closed in Bosnia-Herzegovina with about 3.4 million voters and a record-low 41.5% turnout; early results point to Zeljka Cvijanovic, Denis Becirovic and Darijana Filipovic winning the three presidency seats, while the vote also featured new digital ID and ballot scanning amid economic slowdown and EU-accession gridlock. Energy & Trade Ties: Serbia’s foreign ministry says it met Azerbaijan’s new ambassador to deepen cooperation in energy, trade and investment, highlighting Azerbaijan’s support for Serbia’s sovereignty. Student List Agenda: In Belgrade, the “Student List” presented plans touching mining, agriculture and state land, including claims about copper reserves and a deal framed as “handed over to the Chinese.” Heating Costs Pressure: A report compares Serbian district heating bills with alternatives, arguing heating plants remain among the most expensive options after price hikes, while households weigh comfort against rising costs. EXPO Merch Debate: EXPO 2027 souvenirs are already sold in Belgrade, but pricing raises questions about whether the push is for locals or for “millions of visitors.” Regional Politics Spillover: Serbian Orthodox Church leaders again warned about persecution of Christians in Palestine, urging protection of religious rights.