15/06/2026

IMF: Successful completion of the third review under PCI – Serbia’s strong fundamentals as a buffer against external risks

The IMF Executive Board concluded the third review of implementation of the economic programme supported by the Policy Coordination Instrument (PCI) for the Republic of Serbia.

Given Serbia’s economic policy measures and strong macroeconomic performance, the decision was made without convening a formal Board meeting, a possibility used when assessed that a formal discussion is not needed.  

In its press release, the IMF Executive Board noted, inter alia, that the performance under the agreed economic programme remains robust:

  • the implementation of structural reforms progresses well,
  • all reform targets have been completed on schedule,  
  • all quantitative targets for end-2025 have been met.

The IMF states that the Serbian economy has remained resilient despite intensified external headwinds. Strong economic fundamentals enable Serbia to cope with these headwinds even if the Middle East conflict proves prolonged. A broadly aligned external position, moderate public debt, high FX reserves and a well-capitalised banking system should help the economy navigate these challenges.

The IMF points out the following when it comes to Serbia’s key economic indicators:

  • Despite intensifying external and domestic headwinds, Serbia’s economy has remained resilient.   
  • Economic activity strengthened in early 2026. Growth is projected to stay strong in 2026 and to accelerate to 4% in 2027.
  • Headline inflation remained moderate and within the NBS’s tolerance band.
  • FX reserves stayed at exceptionally high levels.  
  • The banking sector remains sound, supported by strong capitalisation, liquidity and profitability.
  • The IMF also highlights the reforms that should remain a focus in the period ahead, including the already identified reforms in the energy sector, as well as reforms aimed at supporting Serbia’s transition to a higher value-added growth model. Temporary measures adopted in response to numerous external risks should, if necessary, be accompanied by a reprioritisation of current and capital spending. Fiscal policy should remain anchored by the 3% of GDP deficit ceiling in 2026–2027 and by adherence to the fiscal rules governing public sector wages and pensions. Monetary policy should remain restrictive and be tightened further if inflation expectations increase.

“The successful completion of the third review of the PCI-supported economic programme is yet another proof that Serbia continues to pursue sound economic policies.

  • Y-o-y inflation has been moving around the 3% target band midpoint since September 2025, standing at 3.5% in May.
  • We have also preserved the relative stability of the dinar against the euro, despite pronounced volatility, uncertainty and unpredictability in global financial and commodity markets.
  • The country’s record-high FX reserves, amounting to EUR 29.9 bn at end-May 2026, remain a guarantee of security and stability going forward. Indicators of reserve adequacy, such as the coverage of approximately seven months of imports of goods and services, point to a more than adequate level of reserves.

Taken together, these factors – including a stable, resilient and well-capitalised banking sector, with the record-low share of NPLs – will continue to provide significant support to the resilience of our economy in the period ahead,” Governor Jorgovanka Tabaković concluded.

(The Policy Coordination Instrument was approved to the Republic of Serbia on 9 December 2024 for a period of 36 months. It is advisory in nature and does not involve the use of financial resources. It is approved to countries that are implementing credible economic policies. Performance under the programme is monitored within regular semi-annual reviews.)

Governor’s Office