IMF: Successful Completion of the Second Review of Serbia’s Arrangement; GDP Growth Expected to Accelerate to 3% in 2026

According to the NBS, the IMF Executive Board noted that, within the framework of the Policy Coordination Instrument, the authorities are implementing key structural reforms and have successfully completed the second program review. It also stated that prudent macroeconomic policies, supported by strong cooperation with the IMF and the accumulation of substantial buffers are helping Serbia navigate the current challenging period.

"The high level of foreign exchange reserves, sizable government deposits, and a resilient, well-capitalized banking sector provide important support in addressing current challenges. Resolving the issue of sanctions on NIS would further reduce uncertainty," as added in the statement.

It was also noted that fiscal discipline is being strictly maintained, while monetary policy remains cautious, thereby preserving the credibility of economic policies. Economic activity has slowed due to intensified domestic and external challenges; however, following real GDP growth of around 2% in 2025, growth is expected to accelerate to 3% in 2026 and further to 4.6% in 2027.

IMF Notes That Inflation Has Declined

The IMF Executive Board also noted that inflation in Serbia has declined and fallen below the National Bank of Serbia’s target midpoint of 3%, while the central bank has continued to conduct an appropriate monetary policy.

It was emphasized that the continuation of prudent policies is essential for preserving policy credibility going forward. The fiscal deficit is expected to remain below the agreed limit of 3% of GDP—the program’s key anchor supported by controlled current spending, strict adherence to fiscal rules governing public-sector wages and pensions, and careful prioritization of investments.

"Serbia Is Pursuing Sound Economic Policy"

With such discipline, the statement emphasized, fiscal space will be preserved to respond to shocks and support further reductions in public debt. NBS Governor Jorgovanka Tabakovic said that this assessment by the IMF Executive Board, as well as previous ones, demonstrates that Serbia is pursuing sound economic policy, having built significant buffers and demonstrated strong management under shock conditions.

Foto: Tanjug/Strahinja Aćimović

"The reserves we have built are a guarantee of stability in a period of pronounced global uncertainty. We have ensured and maintained a relatively stable dinar-to-euro exchange rate, as well as record-high foreign exchange reserves. We have also significantly increased our gold reserves, which now account for around 20% of our total foreign exchange reserves. The banking sector is stable and highly capitalized, with non-performing loans at a minimum," she said.

"Banking Sector Is Strong"

The NBS statement further notes that Governor Tabakovic emphasized the IMF’s assessment that monetary policy is appropriate and the banking sector strong. The continuation of a cautious monetary policy and a resilient financial sector will remain key pillars in a period of heightened uncertainty, alongside projected inflation expected to remain within the NBS target range.

"This is yet another confirmation that the National Bank of Serbia is conducting sound monetary and prudential policy, in coordination with other policies and stakeholders within our ecosystem," she concluded.

The NBS recalled that the current Policy Coordination Instrument was approved for Serbia on 9 December 2024 for a period of 36 months. The instrument is advisory in nature and does not envisage the use of financial resources. It is granted to countries implementing credible economic policies, with the program reviewed through regular semiannual assessments.

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