Republic of Serbia: 2025 Article IV Consultation, First Review Under the Policy Coordination Instrument, and Request for Modification of Targets-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Serbia

Serbia’s prudent macroeconomic policies and strong engagements with the IMF have delivered impressive results. Economic growth has been resilient, and fiscal and external buffers have strengthened. After successfully completing an IMF-supported Stand-By Arrangement (SBA), the authorities requested a 36-month, non-financing Policy Coordination Instrument (PCI)— approved in December 2024—to reinforce their commitment to sound policies, support structural reforms, and anchor fiscal discipline. Reflecting these achievements, Serbia received its first-ever investment grade sovereign rating last year. Inflation has gradually declined toward the National Bank of Serbia’s midpoint target, and unemployment has fallen to its lowest level in a decade. However, rising headwinds are weakening a cyclical upswing of the economy, and risks are to the downside with heightened domestic and global uncertainty.