Macroeconomic Developments and Financial Sector Movements in Serbia (Procredit Bank)

Summary

• Inflation was 4.1% y/y in September, affected by a low base effect in food prices and rising oil derivative prices.p.2
• The August projection for GDP growth stands at 3.2% for 2026 and 4.5% for 2027.p.2
• The current account deficit narrowed to EUR 2.1 bn in eight months of 2026, with exports growing 8.5% y/y against imports at 6.4% y/y.p.2
• Public debt stood at 43.3% of GDP at end of August, with a general government fiscal deficit of RSD 109.3 bn in January-August.p.10
• The key policy rate was kept unchanged at 5.75% in October.p.11
• Credit activity grew 15.9% y/y in August, with loans to households up 19.6% and loans to businesses up 11.1%.p.12
• The share of non-performing loans in total gross loans was 1.97% in August 2026.p.16

Key insights

1. Real GDP growth in 2025 amounted to 2.1%, and growth in H1 2026 was 3.6% y/y.p.5
2. The unemployment rate fell to 7.2% in Q2 2026, its lowest level.p.9
3. Foreign exchange reserves stood at EUR 29.9 billion at end-September.p.14
4. Standard & Poor's assigned Serbia an investment grade rating of BBB- in October 2024.p.13
5. The dinarisation of household receivables rose to 56.9% in August 2026.p.15
6. The net stable funding ratio of the banking sector was 160.85% in June 2026, against a regulatory minimum of 100%.p.17
7. The loan to deposit ratio for non-financial customers was 84.24% at the end of August 2026.p.17
8. The NPL ratio fell from a record 23.18% in May 2015 to 1.97% in August 2026.p.23