Serbia’s creditworthiness continues to be endorsed by Fitch Ratings, which has upheld the nation’s Long-Term Foreign-Currency Issuer Default Rating at 'BB+' and assigned a Positive Outlook. This decision stems from Serbia's robust policy amalgam and disciplined fiscal governance, factors that contribute to the country’s economic resilience.
The rating assessment highlights Serbia’s enhanced international reserves and its comparatively high GDP per capita relative to other 'BB' rated nations, identifying these elements as pivotal underpinnings for the rating affirmation. However, Fitch balances these positives with cautionary observations, citing Serbia's substantial share of foreign-currency-denominated public debt and considerable dependence on external financial inflows. Further concerns include the euroization of the banking sector and persistent current account deficits.
In 2025, Serbia's economic expansion slowed, registering a 2% growth rate, underperforming earlier forecasts. This deceleration was influenced by diminished foreign direct investment inflows, elevated political uncertainty, and imposed sanctions on the oil company NIS. Despite this, Fitch anticipates a gradual economic recovery, projecting real GDP growth to reach approximately 4.2% by 2027. This optimistic trajectory is expected to be fueled by initiatives outlined in the 'Leap into the Future 2027' strategy, rejuvenated private sector investments, and sustained consumer spending.
Fiscal dynamics in Serbia reveal a widening of the deficit, which is estimated at 2.6% of GDP for 2025, yet this figure remains beneath both the peer group median and governmental targets. Fitch projects this deficit to broaden to around 3% during 2026-2027, aligning with the 'BB' median. This projection takes into account anticipated pre-election fiscal leniency, balanced by a continued governmental commitment to maintaining a deficit ceiling of 3% of GDP.
The country’s public debt ratio has improved, with general government debt estimated to have declined to 44.6% of GDP in 2025, a level significantly lower than median debt ratios observed in 'BB' and 'BBB' rated peers. Fitch forecasts stabilization of public debt near this reduced level through 2026 and 2027.
Serbia's socio-political landscape experienced protests led by students following an infrastructure accident in Novi Sad in November 2024; however, these demonstrations have notably dissipated throughout the latter half of 2025. Looking ahead, presidential elections are slated for the spring of 2027 with parliamentary elections expected by the end of the same year, although the sitting President Vucic has intimated the possibility of earlier polls.
On the energy front, the Serbian government has reached a decisive arrangement to transfer the Russian majority stake in oil firm NIS to Hungarian energy group MOL. This transaction is a response to sanctions imposed by the U.S. Treasury in October 2025 and awaits final approval from the U.S. authorities, anticipated before March 2026 concludes.
Inflationary pressures eased below 3% as of September 2025, a development attributed to regulatory caps on profit margins for essential commodities. Fitch forecasts a gradual rollback of these caps beginning in March 2026, which is expected to elevate average annual inflation to around 3.9% by 2027.
Monetary policy has remained steady, with the National Bank of Serbia holding its key interest rate at 5.75% since September 2024. Fitch projects that cumulative reductions totaling 125 basis points could occur by 2027, reflecting a cautiously accommodative stance.