Serbia's economy grew more slowly under the Serbian Progressive Party (SNS) than in the preceding decade and lagged most regional peers, the Vienna Institute for International Economic Studies (wiiw) said in an analysis ahead of parliamentary elections on October 25.

Average annual economic growth was 2.4% in 2012-2025, compared with 4.2% in 2001-2011, economist Branimir Jovanović said in the report, titled "Serbia's economy under Vucic: Far from a miracle".

Among nine economies in the region, Serbia's average growth was higher only than North Macedonia's and marginally Bulgaria's, while Kosovo, Albania, Montenegro, Romania, Bosnia and Herzegovina and Croatia grew faster, the analysis found.

The findings challenge the SNS's portrayal of its economic record as a success story built on rising wages, job creation, foreign investment and infrastructure development, a central theme of its campaign ahead of the October 25 vote.

The report acknowledges that unemployment has fallen, wages have risen, foreign investment has continued and the government has built new motorways. However, it argues that these gains have been offset by stagnant employment in recent years, higher living costs, widening inequality and declining social spending.

Unemployment fell from around 23% in 2011-2012 to below 9% in 2024-2025, but employment has stagnated since 2019, at around 2.9mn people, and declined slightly in 2025, the report said.

Average net wages rose by about 150% between 2012 and 2025, from around €370 to €930 a month, while per capita consumption increased by approximately 140%. For a family of four with two average incomes, wages covered 67% of consumption in 2025, up from 63% in 2012, according to the analysis.

Income inequality also increased. The share of post-tax income received by the poorest fifth of the population fell from 4.3% in 2011 to 4.1% in 2024, while the richest 10% increased their share from 35.5% to 37.6%. Social protection spending, excluding health and pensions, declined from around 4% of gross domestic product in 2011 to 2.8% in 2023.

Foreign direct investment (FDI), a key pillar of the government's economic strategy, averaged 5.7% of GDP annually in 2012-2025, slightly below the 6.1% recorded in 2001-2011. In 2025, FDI inflows fell to 3.9% of GDP and are likely to decline further in 2026, Jovanović said.

Meanwhile, income earned by foreign investors rose to more than 5% of GDP in 2024 and 2025, exceeding new FDI inflows last year, the report said.

Public investment has increased to around 7% of GDP since 2021, but has been concentrated on motorways. The length of Serbia's motorway network improved relative to the European Union average, while other indicators, including roads, railways, electricity generation capacity and access to water and sanitation, fell further behind, the analysis found.

The report also pointed to weak domestic private investment, which it attributed to shortcomings in the rule of law, corruption, poor governance and the lack of effective industrial and innovation policies to support domestic businesses.

The findings come as the SNS faces its biggest electoral challenge yet from a student-backed list, formed out of nearly two years of anti-corruption protests sparked by the deadly collapse of a railway station canopy in Novi Sad in November 2024.

The student movement is seeking to translate its nationwide protest campaign into electoral support, with candidates drawn from academia and other professions and a programme focused on institutional reform, judicial independence and anti-corruption measures.

Jovanović said an SNS victory would likely mean continuity in an economic model centred on foreign investment and motorway construction, with less emphasis on inequality and domestic entrepreneurship. A change of government would not guarantee better economic outcomes, he added, but could open the way for a reassessment of policy.