Belgrade [Serbia], January 13: Serbia's gross domestic product (GDP) expanded by 2 percent in the first 11 months of 2025, down 2.2 percentage points from the same period a year earlier, according to the January Macroeconomic Analyses and Trends report released on Monday.
The report, published by the Belgrade-based Economic Institute in cooperation with the Serbian Chamber of Commerce, said that economic activity weakened toward the end of the year. The slowdown became more pronounced in the fourth quarter of 2025 amid pressures on industrial output and investment.
The report highlighted growing divergence across sectors. Motor vehicle exports rose 44.1 percent year-on-year in November, driven mainly by electric vehicle production at the Fiat plant in the central Serbian city of Kragujevac. By contrast, output of petroleum products fell by 44 percent as Serbia's sole oil refinery operated at minimal capacity amid U.S. sanctions on its Russian majority owner.
Construction activity declined notably in 2025, reducing 0.4 percentage points from GDP growth, compared with a positive contribution of 0.2 percentage points a year earlier. Net foreign direct investment plunged 53.2 percent year-on-year in the first ten months of 2025 to 1.72 billion euros, the report said.
External challenges continued to weigh on the economy, including rising trade frictions among major economies. In mid-December, the United States banned imports of tires produced by the Chinese-owned Linglong plant in northern Serbia over concerns related to forced labor. The report warned that the move could affect parts of Serbia's rubber and plastics sector.
Serbian exporters are also facing stricter environmental requirements from the European Union. From Jan. 1, 2026, the EU's Carbon Border Adjustment Mechanism is set to expand to cover a broader range of downstream manufactured goods, including certain household appliances and industrial products, potentially raising compliance costs for producers.
Despite these pressures, Serbia's trade ties with China continued to deepen. China became Serbia's second-largest trading partner in 2025, accounting for 11 percent of total trade, up from 10 percent a year earlier. China's share of Serbia's imports rose from 13.2 percent to 15.4 percent, while exports slipped from 6.0 percent to 5.5 percent.
Looking ahead, the report projected industrial production growth of 0.5 percent in 2026, while manufacturing output is expected to contract by 1.0 percent.
Source: Xinhua News Agency
