The IMF says Serbia’s economy remains resilient, with growth expected to accelerate to 4% in 2027, but warns that geopolitical risks cloud the outlook. It recommends phasing out fuel excise cuts, strengthening tax administration and compliance, and advancing fiscal transparency and governance reforms to support revenue mobilisation, investment and long-term economic growth.
On 15 June 2026 the IMF issued a report following the Third Review under the Policy Coordination Instrument (PCI). The report notes that Serbia’s economy has remained resilient, and economic activity strengthened in 2026, following economic growth of 2% in 2025. Growth is projected to rise to around 2.8% in 2026 and to accelerate to 4.0% in 2027. Owing to the elevated geopolitical uncertainty, risks to the outlook are towards the downside.
The IMF considers that the measures to cushion the energy price shock should be temporary and targeted, with fuel excise cuts phased out by July 2026. Prolonged subsidies for fuel consumption would be distortionary and regressive. Any additional support on energy costs should be targeted to vulnerable households and should safeguard fiscal space for investment priorities.
Structural reforms to strengthen fiscal transparency and revenue administration should continue. Monitoring and appraisal of large public investment projects can enhance value for money and reduce fiscal risks. Publication of additional data on local governments, mineral taxation and public-private partnerships will strengthen transparency and accountability. The government should continue to strengthen tax administration capacity and compliance, improving the targeting of tax audits, to support revenue mobilisation.
The report notes that broader structural reforms can support Serbia’s transition to a higher value-added growth model. Governance reforms should focus on reducing integrity risks in business regulation, licensing and public service delivery. Improving the efficiency of judicial dispute resolution is important for a favourable investment climate. The authorities should also preserve labour market flexibility as they align the labour laws with EU requirements. Trade facilitation reforms would further support Serbia’s integration into the EU.
