Serbia's Economy Remains Strong Despite Political Unrest

Large-scale protests have taken over Serbia as people demand accountability from the government after the collapse of a newly renovated train station roof in Novi Sad killed 15.

Thousands of Serbians blocked on Sunday the main boulevard of the central city Kragujevac, the latest in a series of student-led protests over last November's deadly collapse of a train station roof. The increasing pressure being applied by the university student-led movement has already forced the resignation of several high-ranking officials.

The student-led demonstrations, organized through social media, have grown into a broader political pushback against the ruling Serbian Progressive Party (SPP). They have demanded a thorough investigation into the station incident, accountability for those responsible, and reforms to prevent such disasters in the future.

The protestors have criticized an alleged erosion of democratic institutions, a lack of media freedom, and the concentration of power in President Aleksandar Vučić and the SPP. Unlike previous demonstrations, which opposition parties often led, the government has struggled to dismiss the protestors as politically motivated or orchestrated by external forces.

"This is a unique situation in Serbia," Tonino Picula, a Croatian Member of the European Parliament, said in an interview for Slobodna Evropa. "The protests have grown from a student expression of dissatisfaction into a mass civic movement, representing a significant form of social activism."

Student-Led Protests Occur Despite Strong GDP Outlook

Despite the political unrest, Serbia's economy remains strong. Fitch Ratings on January 31 forecasted real GDP growth to rise from an expected 3.9% in 2024 to 4.2% in 2025 and 4.4% in 2026. Fitch affirmed Serbia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘BB+’ with a Positive Outlook.

"Serbia’s ratings are supported by a sound policy mix," Fitch said. They include" a record of prudent fiscal management, robust economic growth outlook, strengthened international reserves and stronger GDP per capita," it added.

The political situation "on the policy mix should be small but it could lead to increased spending pressures or delay in reform and project implementation," Fitch added.

The government's response to the protests has been mixed. While it has avoided large-scale repression, it failed to address the protesters' main demand. Prime Minister Miloš Vučević resigned in late January, and the mayor of Novi Sad stepped down, because of the protests.

Serbian Leaders Deploy Mixed Policies Against Student-Led Protests

Vučić and his allies have used a mix of dismissive rhetoric and accusations that the protests are part of a “color revolution” orchestrated by foreign actors.

This narrative, frequently employed by authoritarian-leaning governments, attempts to discredit organic, domestic opposition by suggesting it is being manipulated by Western governments.

The Serbian government has also sought to control the narrative through state-aligned media, which largely downplays the scale of the protests or presents them as a threat to national stability.

"Students started this protest, but it has escalated into a much broader movement," Duško Radosavljević, a tenured law professor at the University of Novi Sad, told Doha-based Aljazeera, calling the current government a "metastasis of Slobodan Milošević's regime."

Serbian Protestors Want Institutional Reform

But these moves have done little to quell the unrest.

Milošević, who led the country through the 1990s and played a key role in the Yugoslav Wars, became the first sitting head of state charged with war crimes by the International Criminal Court. Foreign media, including BBC, described his rule as authoritarian, kleptocratic, and suppressive regarding free speech and media freedom.

The protestors have "made it clear that they're not seeking anything from President Vučić," Radosavljević added. "Instead, they're seeking that Serbian institutions, which they pay for hand-over-fist, solve these problems.

Over two decades later, Radosavljevic sees clear parallels with Milošević.

"In this entire story, they [the population] seek institutions to start functioning, and that's what those in power fear, Vučić especially. If institutions started working, they would lose – not only their power but probably their freedom as well."

EU Takes ‘Wait and See' Approach to Student-Led Protests

The European Union has closely monitored the situation, but its response has been cautious.

While the European Parliament has expressed support for the protesters' right to peaceful assembly, the EU has been reluctant to take a stronger stance. Naturally, this approach drew criticism that the EU prioritizes stability over democracy, particularly given Serbia's strategic importance in the region.

For the EU, Serbia is a straightforward expansion to the East, with a notable industrial base and tradition in automotive and weapons manufacturing. Furthermore, it has significant natural resources, including copper and lithium—two metals necessary for the green technology transition.

"The EU has chosen a ‘wait and see' approach, hoping the situation will resolve itself internally," Picula said. "But these risks undermine the EU's credibility as a champion of democratic values."

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