Serbia trims 2026 growth forecast as fuel shock hits demand and NIS uncertainty persists

Serbia’s outlook for 2026 is being marked down as an external fuel-price shock collides with lingering uncertainty around the country’s key energy asset. The combination is already working its way into expectations for domestic demand, and it is prompting analysts to lower their view of how quickly the economy can regain momentum.

GDP forecast cut amid slower momentum

Banking sector analysts now expect GDP to expand by around 2.4% in 2026, down from earlier projections of 2.75%. The downgrade reflects a broader pattern of international revisions, with multilateral forecasts also trimmed in recent weeks as the global environment has become more challenging.

Oil prices drive the revision

The main factor behind the change is a surge in global oil prices that has lifted energy costs across the region. Oil is now expected to remain in the $80–90 per barrel range, compared with earlier baseline assumptions of $55–60. Analysts link the higher price path to persistent geopolitical risk premiums and ongoing disruptions in supply chains.

Higher fuel costs squeeze consumption and margins

Fuel-price increases are already transmitting into Serbia’s domestic economy. Analysts cite direct effects on household consumption and corporate spending as transport and input costs rise, which reduces disposable income and compresses margins across sectors. They expect the impact to intensify over the course of the year if energy prices remain elevated.

NIS uncertainty adds a second layer of risk

Alongside external pressures, operational and ownership uncertainty surrounding NIS—Serbia’s dominant oil and refining company—adds further downside risk. While the company continues to operate, it is not running at full capacity, and negotiations over potential ownership restructuring remain unresolved, with key deadlines approaching.

Structural vulnerability limits upside

Analysts say this mix reinforces concerns about the resilience of Serbia’s growth model. They note that reliance on foreign direct investment as a primary growth driver appears increasingly vulnerable in a more volatile geopolitical environment, reducing upside even before considering the latest energy shock.

Infrastructure spending and policy support offer partial relief

Despite these headwinds, some factors could help stabilize activity. Investment activity—particularly tied to large-scale infrastructure projects—and preparations for EXPO 2027 have begun to recover after a slowdown in 2025, providing a partial offset to weaker consumption.

The government is also expected to cushion near-term pressure through intervention measures such as temporary fuel price caps, reduced excise duties, and releases from strategic reserves.

Downside scenario points to sharper slowdown

Still, downside risks remain substantial. In a more adverse scenario where energy prices stay elevated or rise further, analysts warn Serbia’s growth rate could drop to around 1.2%, effectively halving current expectations and exposing the economy to a much sharper slowdown.

Taken together, the emerging picture is one of continued growth but tighter constraints: energy costs, geopolitical developments, and progress on resolving major industrial assets such as NIS are now central variables shaping Serbia’s near-term economic trajectory.