German newspaper FAZ: Dark economic times for Serbia

Mass dissatisfaction among citizens, sanctions against NIS, and the collapse of a foreign policy in which Aleksandar Vučić wanted to be on good terms with all sides of the world, these are the reasons for Serbia’s economic stumbling

The President of Serbia Aleksandar Vučić has never been under as much pressure as he is today. Part of Vučić’s problems are economic in nature, and this has to do with the framework set by U.S. President Donald Trump.

According to unanimous assessments by economists, economic growth in Serbia will be halved in 2025, foreign investments have fallen, and domestic consumption is faltering.

Foreign policy-wise, the swing policy of this EU candidate is increasingly crumbling, that fragile balance based on good relations with Moscow, Beijing, Washington DC, and Brussels. And this has severe consequences for the domestic economy.

U.S. sanctions are hitting the Serbian Oil Industry (NIS), which is majority-owned by Russians. The U.S., which wants to curb Russian energy exports and thereby weaken the Russian war economy, demands that Gazprom withdraw. But the Russians do not want to sell. This puts Vučić in a bind.

It is noted that Vučić tried to avoid the problem through good relations with Trump. It was no coincidence, the newspaper assesses, that a special law was intended to give Trump’s son-in-law Jared Kushner the right to build on the site of the General Staff in Belgrade.

However, the deal fell through when Kushner withdrew due to public protests and an indictment proposal against Minister Nikola Selaković.

Kushner’s withdrawal was not the only slap in the face. A few days later, the U.S. banned imports of tires from the Linglong factory in Zrenjanin, which belongs to Chinese investors. Serbian exports to the U.S. remain burdened by an unusually high tariff of 35 percent. It is unlikely to change because the U.S. classifies Serbia among countries with significant deficits in the areas of democracy, free elections, and the rule of law.

In this situation, the Serbian government welcomed with great satisfaction the news that the U.S. had nevertheless approved NIS to operate without sanctions until January 23, which again starts the refinery in Pančevo.

Speculations have been fueled that Hungarian Prime Minister Viktor Orbán is behind the approval, which again brings the theory that the Hungarian MOL could buy Gazprom’s shares in NIS. The ADNOC concern from Abu Dhabi is also mentioned.

Moscow reacted negatively to earlier signals that Serbia might nationalize NIS, and that President Vladimir Putin reminded Serbia of its “obligations” under the contract.

As a threat, it is interpreted that Russia extended the gas supply contract to Serbia for only three months, until the end of March 2026.

Relations between the two Orthodox brotherly nations were already disturbed earlier when Moscow sharply criticized the sale of Serbian ammunition to Ukraine. Such arms exports, which received praise from the West, Vučić completely stopped this summer, which in industrial circles is interpreted as Belgrade’s unreliability.

The relations between Belgrade and the EU, as the largest trading partner and investor, are also disrupted: no new negotiating cluster has been opened, and Vučić avoided attending the EU-Western Balkans Summit at the end of the year.

Additionally, China is not announcing new economic activities in Serbia.

Internal protests against Vučić’s rule, external economic pressure, a poor environment, and uncertainty, all of this negatively affects the development of the economy in this country with 6.5 million inhabitants.

The foreign investments, a decline in the construction sector, weak domestic demand, and growth of only two percent for 2025. For this year, less than three percent is expected, although the National Bank of Serbia is optimistic and announces 3.5 percent. /Frankfurter Allgemeine Zeitung/