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Executive Summary
According to analyses published by specialized open sources in June 2026, the Republic of Serbia continues to diversify its external economic relations, gradually reducing its dependence on a single source of foreign capital while maintaining the European Union (EU) as its principal economic partner. The assessment focuses on the two main pillars of Serbia’s external economic relations—foreign direct investment (FDI) and foreign trade—and indicates a growing strategic balance between the EU, China, international financial institutions and, increasingly, the Gulf states.
1. Foreign Direct Investment
The analysis concludes that the European Union no longer enjoys a dominant position as the exclusive source of foreign investment in Serbia. Instead, the country’s investment profile has become increasingly diversified, with capital inflows originating from the EU, international financial institutions (IFIs), Asian countries—primarily China—and, more recently, the Gulf states.
Since 2025, annual FDI inflows have remained stable at approximately EUR 4–5 billion.
The EU continues to account for the largest cumulative share of foreign direct investment, representing approximately 50 percent of total FDI. European investments are concentrated in the automotive industry, electrical equipment manufacturing, machinery production, banking and retail sectors. A significant proportion of these projects are supported through financing provided by the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB), forming part of the EU’s broader investment framework for South-East Europe.
Chinese investment has acquired a strategic role within Serbia’s economy, particularly in heavy industry, steel production, metallurgy, tyre manufacturing, energy infrastructure and other capital-intensive sectors with long-term development prospects.
At the same time, investment originating from the Gulf states has expanded considerably over the past year, targeting urban development, transport infrastructure, real estate, conventional and renewable energy, as well as projects related to the green transition.
The analyses further indicate a gradual shift in Serbia’s strategic approach towards foreign investment. While the primary objective in previous years was to maximize the volume of incoming foreign capital, current policy discussions increasingly focus on the ownership of strategic assets, control over decision-making in key economic sectors, and the proportion of long-term financial returns retained within the domestic economy.
Overall, the available assessments suggest that Serbia is progressively strengthening its capacity to generate economic growth while reducing excessive dependence on any single external investor.
2. Foreign Trade
The latest available foreign trade data, covering the period January–April 2026, indicate total merchandise trade amounting to EUR 25.9 billion, representing an increase of 3.9 percent compared to the corresponding period of 2025.
Exports increased by 8.2 percent to EUR 11.78 billion, whereas imports rose by only 0.5 percent to EUR 14.11 billion. This development suggests a gradual reduction in Serbia’s dependence on imported goods and industrial inputs.
The machinery and transport equipment sector provides the clearest illustration of this trend. Exports increased by 20.4 percent to EUR 3.8 billion, while imports in the same sector expanded by only 4.5 percent, reaching an equivalent value. These figures point to improved industrial competitiveness and growing domestic value-added production.
The energy sector, however, remains Serbia’s principal structural vulnerability. Exports of petroleum products declined by 40 percent to EUR 287 million, while imports of energy products, despite decreasing by 10.8 percent, remained significant at EUR 1.61 billion
3. Geographical Structure of Foreign Trade
The European Union remains Serbia’s largest trading partner, accounting for approximately 59 percent of the country’s total foreign trade. During the reporting period, Serbian exports to the EU reached EUR 7.44 billion, while imports from EU Member States amounted to EUR 7.84 billion.
China continues to represent Serbia’s largest source of trade imbalance. Imports from China totalled EUR 2.17 billion, whereas Serbian exports to the Chinese market amounted to only EUR 771 million. These figures demonstrate Serbia’s continued dependence on Chinese machinery, electronic equipment, industrial components and consumer goods.
Within Serbian economic circles, this relationship is increasingly described as a “triangular economic structure,” whereby China supplies industrial inputs and equipment, Serbia performs manufacturing and processing activities, and the European Union serves as the principal destination for finished products.
Assessment
The available data indicate that Serbia is pursuing a deliberate policy of diversifying its external economic partnerships. While the European Union maintains its position as the country’s leading investor and principal trading partner, China and the Gulf states have significantly expanded their economic presence, thereby providing Belgrade with greater flexibility in pursuing its economic and foreign policy objectives.
Although the EU remains indispensable for Serbia’s export-oriented economy, the diversification of investment sources has reduced the country’s reliance on European capital alone and strengthened its negotiating position vis-à-vis external partners.
Regarding foreign trade, the figures unequivocally confirm the European Union’s central role as Serbia’s primary export market. At the same time, the persistent trade deficit with China raises questions concerning the economic effectiveness of the Serbia–China Free Trade Agreement. Available indicators suggest that the agreement has, thus far, generated more tangible benefits for Chinese exports than for the competitiveness of the Serbian economy, notwithstanding its broader political significance for bilateral relations.
Conclusion
Serbia’s economic model is evolving towards greater diversification of external capital while preserving strong trade integration with the European Union. The country continues to pursue a pragmatic, multi-vector economic policy aimed at balancing relations among the EU, China, international financial institutions and the Gulf states. This approach enhances Belgrade’s strategic autonomy, although structural vulnerabilities—particularly in the energy sector and the growing trade imbalance with China—remain significant long-term challenges.
