AGP Executive Report

Metro Construction: A Chinese tunnel-boring machine for Belgrade’s first metro line is waiting at the Romanian border; officials say the line is due to be built by the end of 2029. Energy Security: Serbia approved the environmental study for a 113-kilometre oil pipeline from Hungary to Novi Sad, designed to carry up to 5.5 million tonnes a year. Power Sector: EPS reported a first-half profit above plan, but coverage also points to engineer departures and falling electricity and coal production. Trade and Industry: Indonesia and Serbia agreed to deepen cooperation in industrial processing, food and energy; Indonesian investment in Serbia already includes instant-noodle and processed-mushroom production. Economic Outlook: The IMF raised its 2026 growth forecast for Serbia to 3.3%, projecting 4% growth in 2027. Manufacturing: ENGEL is expanding its production network with a site in Serbia.

Economic Outlook: The IMF expects Serbia’s growth to accelerate to 3.3% in 2026 and 4% in 2027. Foreign Reserves: The National Bank’s gross FX reserves fell €946 million in September to €29.86 billion, still covering 6.7 months of imports; higher energy-import demand contributed to pressure. Manufacturing: Austrian plastics machinery group ENGEL is opening a plant in Kikinda to make machined components, planning to recruit 150 people over three years and strengthen European supply chains. Energy Infrastructure: A green permit has cleared the Hungary–Serbia oil pipeline for construction, with its route crossing Vojvodina. Household Energy: Serbian pellet prices have climbed sharply, reaching as much as 52,000 dinars a tonne as early-season demand rises.

Manufacturing: Austrian plastics machinery maker ENGEL will open a production site in Kikinda, making machined components and recruiting 150 employees over three years. The plant is expected to strengthen European supply chains and shorten delivery times. Energy Infrastructure: The Hungary–Serbia oil pipeline has received a green light for construction, while Serbia is due to start laying pipes for its gas link with North Macedonia. Household Finances: New borrowing rose sharply in the second quarter, with cash loans accounting for 87% of newly approved dinar loans to households—pointing to mounting pressure on everyday budgets. Heating Costs: Pellet prices have climbed to as much as 52,000 dinars, up from 26,000–35,000 dinars last year, as households buy fuel early and demand rises.

Energy: Serbia will join a new regional oil coordination group to share supply data and respond to shortages as global prices rise. District heating systems began warm tests ahead of the official Oct. 15 season; Vrbas still had an unresolved gas contract. Infrastructure: Serbia plans to start laying pipes for its gas interconnector with North Macedonia next week. Belgrade also opened a 365-million-dinar tender for an 80-metre mast and park works at Ušće. Industry and jobs: Employment in Serbian industry fell 3.3% year on year, while wages are rising faster than productivity, raising concerns about competitiveness. Agriculture: Belgium flagged cadmium in frozen raspberries from Serbia; a recent Swiss alert also found levels above the permitted limit, putting export quality controls in focus. Trade and investment: A Serbia–North Macedonia business event in Skopje explored partnerships tied to EXPO 2027, including tourism and other commercial opportunities.

Food Exports: Belgium flagged cadmium in frozen raspberries from Serbia, following Switzerland’s earlier finding of levels above the permitted limit and withdrawal of the product. EXPO Business: Serbian and North Macedonian firms are exploring trade and tourism partnerships ahead of EXPO 2027, after a Skopje networking event drew more than 50 business representatives. Food Standards: Serbia will raise minimum fruit content in jam from 350 to 450 grams per kilogram from 2028, with clearer fruit-content labelling. Industry and Jobs: Industry employment fell 3.3% year on year, while wages are rising faster than productivity, adding pressure on employers’ competitiveness. Energy and Logistics: Serbia plans to start laying pipes for its gas link with North Macedonia, while the Hungarian section of the Budapest–Belgrade railway has passed European safety testing.

Food Manufacturing: Serbia has raised the minimum fruit content in standard jam from 350 to 450 grams per kilogram, with stricter rules taking effect in 2028. Manufacturing Investment: Serbian firm Mercury.AI plans to open a 17,000-square-metre security-camera factory in 2027, with annual capacity of 7.2 million devices. Energy Infrastructure: Work on the gas interconnector with North Macedonia is set to begin, expanding Serbia’s regional supply links. Trade: Serbia-Italy trade reached about €3 billion in the first half of 2026, up 32% year on year; full-year trade topped €5 billion in 2025. Economic Outlook: The National Bank of Serbia held its key rate at 5.75%, while MAT reported GDP growth of 3.6% in the first eight months of the year.

Technology Manufacturing: Serbian security company Mercury.AI won an industry award for its Belgrade surveillance project and plans to open a 17,000-square-metre camera factory in 2027, with annual capacity of 7.2 million devices. Energy Links: Work is set to begin on the first 5 kilometres of the Serbia–North Macedonia gas interconnector. The 145-kilometre link is designed to carry 1.5 billion cubic metres a year, with construction expected to continue into 2028. Trade: Serbia-Italy trade topped €5 billion in 2025 and reached about €3 billion in the first half of 2026, up 32% year on year, figures highlighted at the Italian Trade Agency’s centenary event in Belgrade. Agriculture: Serbia and China discussed joint projects in farm digitalisation and AI, aiming to raise productivity and cut costs through cooperation between companies, universities and research institutes. Business Conditions: The National Bank of Serbia held its key rate at 5.75%; annual inflation was 2.2% in August, with the bank watching price pressures and international risks.

Trade: Serbia-Italy trade exceeded €5 billion in 2025 and reached about €3 billion in the first half of 2026, up 32% year on year. Belgrade marked the Italian Trade Agency’s centenary as both countries look to deepen business ties. Manufacturing: Belgrade security technology firm The Mercury.AI won a regional award for its city surveillance system and plans to open a 17,000-square-metre camera factory in Serbia in 2027, with annual capacity of 7.2 million devices. Energy: Work on the first five kilometres of Serbia’s gas link with North Macedonia is due to begin next week; the 145-kilometre connection is planned to carry 1.5 billion cubic metres of gas a year. Agriculture: Serbia and China are exploring joint projects in farm digitalisation and AI, aiming to raise productivity and cut costs for local producers. Finance: The National Bank of Serbia kept its benchmark rate at 5.75%, citing inflation risks, and expects growth of at least 3.2% this year.

Energy: Serbia will begin laying the first five kilometres of its gas link to North Macedonia next week. The 145-kilometre pipeline is planned to carry 1.5 billion cubic metres of gas a year. Energy Minister Dubravka Đedović Handanović also said hydropower could help store energy as renewable capacity expands. Business and Finance: The National Bank of Serbia held its key rate at 5.75%, citing inflation and international risks; it expects growth of at least 3.2% this year. Manufacturing: Belgrade-based Mercury.AI won a regional security award for its smart surveillance system and plans to open a 17,000-square-metre camera factory in Serbia in 2027. Agriculture: Serbia and China are exploring cooperation on farm digitalisation and AI, while local producer Zeleni Hit is scaling up pesticide-residue-free fruit and vegetable deliveries to Lidl. Trade: Twelve Bulgarian wineries are showcasing their products in Belgrade ahead of the Wine Vision by Open Balkan fair, which runs October 10–12. Transport: Hungary’s section of the Budapest–Belgrade railway has completed European safety testing, bringing the route closer to passenger service.

Security Manufacturing: Belgrade firm Mercury.AI won an industry award for its smart-surveillance system and plans to open a 17,000-square-metre camera factory in Serbia in 2027, with annual capacity of 7.2 million devices. Energy Infrastructure: Work on the first five kilometres of Serbia’s 145-kilometre gas link with North Macedonia is due to begin next week; the pipeline is designed to carry 1.5 billion cubic metres a year. Serbia’s energy minister also highlighted hydropower’s potential to store renewable energy. Agriculture: Serbia and China plan to deepen cooperation on digital tools and AI for farming, while local supplier Zeleni Hit expects to deliver nearly 250,000 kilos and pieces of pesticide-residue-free produce to Lidl by season’s end. Economic Outlook: The central bank held its key rate at 5.75%, citing inflation and global risks. It expects growth of at least 3.2% this year, supported by domestic demand and infrastructure investment.

Gas Infrastructure: Serbia plans to start laying the first five kilometres of its 145-kilometre gas link with North Macedonia next week. The interconnector is designed to carry 1.5 billion cubic metres a year, with most construction expected in 2027 and early 2028. Agricultural Technology: Serbia and China are exploring cooperation on farm digitalisation and AI, including joint projects linking universities, research institutes and companies. The aim is to raise productivity and cut costs for Serbian farmers. Energy Transition: Energy Minister Dubravka Đedović Handanović says hydropower is gaining importance as a source of storage for renewable power, with the Danube a strategic resource. She also warned that transmission networks have lagged behind new generation capacity. Rail Links: ETCS testing is complete on the Hungarian section of the Budapest–Belgrade railway. Domestic passenger services may begin after remaining track work and approvals; international services are targeted for December. Food Production: Serbian grower Zeleni Hit expects to supply Lidl with about 250,000 kilograms and pieces of produce this season under its pesticide-residue-free standard, nearly three times its initial volume.

Agriculture: Construction at Belgrade Co-op is advancing, with new and renovated facilities set to expand fertilizer-mixing capacity. Urban Infrastructure: Belgrade has launched a 864-million-dinar procurement for three New Belgrade roundabouts and related works; bids are due November 11. EXPO 2027: The Belgrade event is a campaign flashpoint, with opposition parties promising to cancel it and audit contracts, while the ruling camp presents it as a driver of economic growth. Rail: ETCS testing on the Hungarian section of the Budapest–Belgrade line is complete. Track adjustments remain before domestic services can start, with international trains targeted for December. Energy: Serbia plans to begin laying pipes for its gas interconnector with North Macedonia next week. Manufacturing: The bankruptcy of Subotica’s former 8. Mart factory has left more than 150 workers without jobs and owed wages.

Rail and Logistics: ETCS testing is complete on the Hungarian section of the Budapest–Belgrade railway. Track adjustments remain, with international passenger services targeted for December if domestic operations run smoothly. Energy Infrastructure: Serbia plans to start laying pipes next week for its 145-kilometre gas interconnector with North Macedonia, aiming to finish in early 2028 and add a supply route. Automotive Exports: Serbian car exports reached about €2.8 billion in the first half of 2026, largely driven by Stellantis. Energy Security: Serbia has fuel reserves for 51 days, below the stated 90-day requirement.

Energy Infrastructure: Serbia will begin laying the first pipes for its 145-kilometre gas interconnector with North Macedonia next week. The link is targeted for completion in early 2028 and would connect Serbia to new regional gas routes. Fuel Security: Serbia’s reserves cover 51 days of net imports, below the 90-day requirement, though that is the strongest position among eight regional markets. Transport: Hungary has completed full-load tests on its section of the Belgrade–Budapest railway. Separately, a new line linking Zemun polje, Belgrade Airport and the National Stadium is expected to carry 10,000 passengers daily from next spring. Power and Industry: Azerbaijan’s SOCAR and Serbian firms have agreed to develop a 500 MW gas-fired power plant in Niš. MOL has also received more time to continue talks on buying the Russian stake in NIS. Agriculture: Severe drought is delaying wheat sowing across northern Serbia; experts say around 50 litres of rain per square metre are needed for proper soil preparation.

Energy Security: Serbia’s fuel stocks cover 51 days of net imports, the region’s highest level but well short of the 90-day requirement; officials cite a different calculation for their claim of 90 days. Rail and Logistics: Hungary has completed full-load tests on its section of the Belgrade–Budapest high-speed line, with the opening date still pending. A separate 18.3-kilometre line linking Belgrade, the airport and the National Stadium is expected to carry 10,000 passengers daily from March or April. Austrian Post has completed its acquisition of Serbian courier D Express. Energy Investment: Work on the Serbia–North Macedonia gas interconnector is due to start next week, with completion targeted for early 2028. Serbia has also agreed with SOCAR and local firms on a 500 MW gas-fired power plant in Niš. Agriculture: Drought is delaying wheat sowing across parts of northern Serbia; experts say about 50 litres of rain per square metre are needed to prepare the soil. Serbia and Slovakia are also discussing closer links between their agricultural producers and companies.

Energy Infrastructure: Serbia’s energy ministry says the first pipes for the Serbia–North Macedonia gas interconnector will be laid next week, with the Serbian section about 145 km and a target to finish the route by Q1 2028, while the Greece–North Macedonia link is expected to be operational in 2027. Regional Energy Talks: Ministers from Serbia, Greece, Bulgaria and North Macedonia met in Belgrade to push the Vertical Gas Corridor and new gas and electricity corridors, including a Thessaloniki–Skopje–Niš oil-products route. EU Enlargement Rules: The European Commission proposes “gradual integration” for candidate countries in selected EU areas, tied to reform progress and strategic alignment, alongside new defence-integration steps for candidates. Logistics & Trade: Rijeka’s Adriatic Gate Container Terminal hit 4M TEUs, strengthening its role as a regional gateway reaching markets including Serbia. Business & Jobs: Austrian Post completed its acquisition of Serbian parcel operator D Express, starting phased cooperation with City Express and bringing a large Belgrade logistics network under one group. Industrial/Workforce Impact: Germany’s reduced work-permit quota is raising concern in the region, but Serbian construction firms expect demand to stay strong, including from Expo 2027 preparations. Economy Outlook: The World Bank projects Serbia growth accelerating to 3.1% in 2026 and 3.7% in 2027, citing public investment, tourism, wages and resilient exports. Elections & Governance: Overseas Serbian groups appealed to the EU/OSCE/US over voting barriers for the 25 October election, including missing polling stations abroad.