The Current Account deficit for RS in October 2025 stood at -396 million RSD, slightly wider than September’s -395 million but significantly narrower than the mid-year peak of -933 million in May. The November print beat the consensus estimate of -600 million, signaling resilience amid global uncertainties. Over the past 12 months, the average deficit has hovered around -540 million, indicating a gradual improvement from earlier in the year.

Drivers this month

• Improved export performance, particularly in manufacturing goods, reduced the deficit pressure.
• Moderate import growth, reflecting cautious domestic demand.
• Services balance remained stable, supported by tourism inflows.

Policy pulse

The current account remains within manageable bounds relative to GDP, aligning with the central bank’s external stability goals. Monetary policy has maintained a steady stance, with no immediate pressure to tighten despite external headwinds.

Market lens

Immediate reaction: The RSD currency appreciated 0.30% against the EUR in the first hour post-release, reflecting market relief at the narrower-than-expected deficit. Sovereign bond yields remained stable, while equity markets showed mild gains.

Core macroeconomic indicators provide context for the current account dynamics. RS’s GDP growth for Q3 2025 was reported at 2.80% YoY, a slight slowdown from 3.10% in Q2. Inflation remains contained at 3.40% YoY, close to the central bank’s 3% target. Unemployment edged down to 7.20%, supporting steady consumption patterns.

Monetary Policy & Financial Conditions

The National Bank of RS has held its policy rate steady at 4.50% since August 2025. Financial conditions remain accommodative, with credit growth at 6.50% YoY. The stable interest rate environment supports investment but also sustains import demand, influencing the current account balance.

Fiscal Policy & Government Budget

Fiscal consolidation efforts continue, with the government targeting a deficit of 2.80% of GDP in 2025. Public investment has been prioritized in infrastructure, indirectly boosting import volumes but expected to enhance export capacity over the medium term.

Market lens

Immediate reaction: The RSD currency strengthened 0.30% versus the EUR, while 2-year government bond yields held steady at 5.10%. Equity indices gained 0.40% in early trading, reflecting positive sentiment.

Looking ahead, the current account trajectory depends on several factors. Export growth is expected to remain robust, supported by new trade agreements and recovering global demand. However, import pressures from energy prices and capital goods could widen the deficit.

Bullish scenario (30% probability)

• Stronger-than-expected export growth (+5% YoY) and stable commodity prices reduce the deficit to -300 million RSD by Q1 2026.
• Monetary policy remains accommodative, supporting investment and external competitiveness.

Base scenario (50% probability)

• Current trends persist, with a modest deficit around -400 million RSD through early 2026.
• Fiscal discipline and moderate global growth keep external imbalances contained.

Bearish scenario (20% probability)

• External shocks, such as energy price spikes or geopolitical tensions, widen the deficit beyond -600 million RSD.
• Monetary tightening to defend currency stability could dampen growth.

Structural & Long-Run Trends

RS’s current account reflects structural shifts toward a more diversified export base. Long-run trends show gradual improvement in trade balances, supported by investment in technology and infrastructure. However, vulnerability to commodity price swings and geopolitical risks remains a key challenge.

The November 2025 Current Account data for RS signals a cautiously optimistic outlook. The deficit is narrower than expected and stable month-on-month, reflecting resilient exports and moderated imports. Monetary and fiscal policies remain aligned to support external stability, though vigilance is required amid global uncertainties. Market reactions underscore confidence but highlight sensitivity to external shocks. Structural reforms and diversification will be critical to sustaining improvements over the medium term.

Key Markets Likely to React to Current Account

The Current Account balance is a key indicator for currency traders, bond investors, and equity markets in RS. Currency pairs and sovereign bonds typically respond to shifts in external balances, while export-oriented stocks reflect underlying trade dynamics.

• USDEUR – Sensitive to RS trade flows and currency valuation shifts.
• RSX – RS export-heavy equity index, tracks trade performance.
• BTCUSD – Reflects risk sentiment which can influence capital flows affecting the current account.
• RSB – Sovereign bond ETF, sensitive to external financing conditions.
• EURRSD – Directly impacted by current account shifts and monetary policy.

Insight: Current Account vs. EURRSD Exchange Rate Since 2020

Year	Average Current Account (M RSD)	EURRSD Exchange Rate (Year-End)
2020	-750	117.50
2021	-620	115.20
2022	-580	113.80
2023	-520	112.50
2024	-480	110.90
2025 (YTD)	-450	109.70

This table shows a clear correlation between a narrowing current account deficit and a strengthening RSD against the EUR. The trend suggests that improvements in external balances support currency appreciation and external stability.

FAQs

What is the significance of RS’s current account deficit?

The current account deficit measures the gap between RS’s exports and imports of goods, services, and income. A smaller deficit indicates improved external balance and reduced reliance on foreign capital.

How does the current account affect RS’s monetary policy?

Monetary policy responds to current account trends to maintain currency stability and control inflation. A large deficit may prompt tightening, while a stable deficit supports steady rates.

What are the main risks to RS’s current account outlook?

Risks include global commodity price shocks, geopolitical tensions, and shifts in trade demand. These could widen the deficit and pressure currency and financial markets.

Takeaway: RS’s current account deficit is stabilizing, supported by resilient exports and cautious imports, but external risks require ongoing policy vigilance.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.

Updated 11/19/25