Republic of Serbia: Third Review Under the Policy Coordination Instrument; Press Release and Staff Report

This paper highlights Republic of Serbia’s Third Review under the Policy Coordination Instrument (PCI). The Serbian economy has shown resilience despite headwinds from energy supply disruptions, a weak harvest, domestic protests, global trade tensions, and the war in the Middle East. The policy mix under the PCI supports macroeconomic stability. The 2026 budget maintains the fiscal deficit at the 3 percent of GDP ceiling while accommodating priority investment. The authorities committed to keeping support measures introduced in response to the global energy price shock temporary and identified contingency measures to offset the associated fiscal costs. Monetary policy has maintained a tightening bias to support continued disinflation. Fiscal-structural reforms are progressing. Program performance remained strong. All end-2025 quantitative targets on the fiscal deficit, primary current expenditure, domestic arrears, and net international reserves, as well as continuous targets, were met. Structural reform implementation also progressed well, with all reform targets completed on time.