Serbia Economic and FDI Outlook

A Record-Low Current Account Deficit was Recorded in 2023, Favourable Developments at the Beginning of 2024 The current account deficit in 2023 amounts to 2.6% of GDP due to strong export growth and lower import Chart 11 Current account balance by component (EUR bn ) 10 Speed-up of investment cycle will be followed by stabilization in share of gross national savings Chart 12 Savings and investment balance (% of GDP) 30% 25% 5 20% 15% 0 10% -3.5% 2.9% -5.2% 4.8% -4.1% -4.2% 2.6% -5 -6.9% -4.0% 5% -6.9% -4.8% -5.0% 0% -10 -5% -2.9% -4.8% -5.2% -15 -10% -4.1% -4.2% -2.6% -4.0% -4.8% -5.0% • 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024* 2025* 2026* Goods ■Secondary income Primary income ■Services ▲ CAD In 2015-2022 Serbia's current account deficit has been fully financed by FDI, which is mostly expected in the following years as well (projected net FDI inflow of around 5% of GDP). • The current account deficit was significantly reduced in 2023, from EUR 4.2 bn (6.9% of GDP) in 2022 to EUR 1.8 bn (2.6% of GDP). In January and February 2024, the CAD amounted to EUR 50 mln. • CAD projection for 2024 amounts to 4.0% GDP, and in the medium term, it should approach the level of 5% of GDP, which is within the bounds of external sustainability. -6.9% -6.9% 2016 2017 2018 2019 2020 2021 2022 2023 2024* 2025* 2026* ■Gross national savings ■Gross domestic investment ■Savings investment balance The S-I gap narrowed in 2023 as a result of increase of gross national savings. • Over the intermediate period, expected stabilization of the gross national savings share will be accompanied by a gradual speed-up of investments in transport, energy and communal infrastructure, as well as in projects related to the international world exhibition EXPO 2027. 8

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