06/05/2026

Talks with the IMF mission completed – Serbia’s strong buffers provide a solid foundation to navigate risks from the international environment

The IMF mission, led by Ms Annette Kyobe, and the Serbian delegation wrapped up their talks on Tuesday, 5 May. Staff-level agreement was reached about the third review under the Policy Coordination Instrument (PCI), pending approval by the IMF Executive Board.

The IMF mission points to considerable risks stemming from the Middle East conflict and to numerous channels of their impact on the global economy – from higher energy prices to uncertainty that weighs on investment and consumption. High FX reserves, moderate public debt and a sound banking sector remain Serbia’s strong buffers against these risks.

The IMF forecasts:

  • that Serbia’s GDP growth will amount to around 2.8% in 2026 and strengthen to 4% in 2027, supported by real income gains, new export capacities in the manufacturing sector, recovering agricultural output, infrastructure and energy investment, and EXPO-related tourism; and
  • that average inflation will measure 3.5% in 2026 and 4.5% in 2027.

Forecasts for all countries are being made under conditions of exceptionally high uncertainty. Further escalation of the Middle East conflict and the associated additional disruptions in the global energy market would increase risks to economic growth and inflation.

The IMF notes that Serbia’s strong buffers – moderate public debt, high FX reserves and a sound banking sector – provide a solid foundation to navigate repeated global shocks. Preserving prudent and predictable macroeconomic policies remains essential to maintain credibility and mitigate risks from the international environment.

During numerous talks with members of the IMF team, Governor Tabaković emphasised, among other things, the following:

  • We have maintained a relatively stable dinar-to-euro exchange rate despite heightened volatility, uncertainty and unpredictability in global financial and commodity markets.
  • FX reserves, which amounted to EUR 28.5 bn at end-March 2026, are a guarantee of security and stability going forward. Reserve adequacy indicators, such as coverage of 6.6 months of the country’s imports of goods and services, point to a more than sufficient level.
  • Additional assurance is provided by record-high gold reserves, which we continue to increase through purchases from domestic production and which currently amount to nearly 54 tonnes, accounting for about a quarter of gross FX reserves.
  • Y-o-y inflation has been moving around the target midpoint of 3% since September 2025, and equalled 2.8% this March.
  • Both overall and individually, banks in Serbia are stable, with high levels of capital and liquidity reserves, significantly above regulatory minimums.
  • NBS measures aimed at supporting household lending have enabled the continuation of double-digit growth in credit activity, driven by increases in lending to both households and businesses.
  • Accelerated credit growth, alongside a reduction in the level of NPLs, has resulted in a further decline in the NPL share in total loans to the lowest level so far – below 2%.
  • FX savings have reached EUR 16.6 bn, while dinar savings have exceeded RSD 220 bn, representing increases of 7.9% and 15.1%, respectively, compared to end-2024.
  • The implementation of the Law on the Protection of Financial Service Consumers, along with supervisory expectations placed on banks to ensure more favourable borrowing conditions for lower-income citizens, contributed to a decline in average interest rates in March 2026 relative to December 2024:
    • from 10.2% to 8.3% on new cash loans, and
    • from 5.0% to 4.5% on new housing loans.
  • Although our regulatory framework for banking is almost fully aligned with EU regulations, we continue to work intensively and at an accelerated pace on further alignment, with the goal of achieving full harmonisation by the end of this year.

“We have demonstrated that we possess the knowledge and tools to respond even in the most challenging global conditions. The buffers we have built through prudent policies are part of the answer as to what makes Serbia an attractive investment destination, and part of the mosaic that places us among countries with an investment-grade credit rating. Record-high FX reserves, a stable dinar-to-euro exchange rate, inflation under control, and a sound banking sector that supports economic growth through lending activity have been and remain a part of our response to new geoeconomic circumstances,” concluded Governor Jorgovanka Tabaković.

The three-year PCI was approved to the Republic of Serbia in December 2024. The second review of the implementation of the PCI-supported economic programme was concluded by the IMF Executive Board at its meeting of 17 December 2025.

The PCI is advisory in nature and does not involve the use of financial resources. It is approved to countries that are committed to reforms and are implementing robust and credible economic policies.

 

Governor’s Office