Serbia's foreign trade deficit narrowed 22.7% y/y to EUR 2.4bn in January-June due to strong exports' growth, which largely offset a mild imports increase, statistics office data showed. The trade gap-to-GDP ratio stood at 7.2% of the full-year GDP forecast, down from 10.3% a year earlier.

Exports climbed 20.3% y/y to EUR 5bn in January-June on the back of higher electricity, petroleum products, road vehicles and non-ferrous metals sales abroad.

Imports inched up 1.9% y/y to EUR 7.4bn in January-June, easing significantly from the 6.0% growth a year earlier.

Seasonally-adjusted data showed that Serbian exports rose 10.6% m/m in June and imports increased by a milder 4.1% m/m in terms of euro, the statistics office said. Road vehicles were the biggest export item in January-June while motor accessories were the top import item.

The main export destinations for domestic producers were Italy (a 16.8% share in total), Germany (12.2%) and China (8.0%). The major import partners were Italy (an 11.7% share in total imports), Germany (11.1%) and Russia (8.0%).

Exports are expected to be the key driver of Serbia’s anticipated 2% GDP expansion this year, offsetting falling household and government consumption.