Economics & Development

Serbia has maintained its macroeconomic position. The authorities successfully implemented a prudent macroeconomic policy mix. The fiscal deficit declined from 7.7 to 2.0% of GDP between 2020 and 2024 and further down to 2.4% in 2025. During the same period, public debt declined from 55.2 to 45% of GDP in 2025. An increase in imports and transfers of income by foreign companies led to a higher current account deficit in 2025 of 4.9% of GDP, compared to 2.4% of GDP in 2023. This in turn led to a small decline in foreign exchange reserves (from an all-time high in 2024), to reach EUR 29 bn in 2025. The inflation rate has peaked in July 2025 and is coming down to the limits set by the NBS target over the recent months. Real GDP growth averaged 3.9% in 2023-2024 but it is now experiencing rapid deceleration and is estimated at around 2% in 2025.

Poverty is inherently multidimensional, encompassing both monetary and non-monetary dimensions. However, these outcomes are often collected in separate surveys, leaving the joint distribution partially unobserved. To improve social poverty comparisons, this paper proposes a new, simple method to address this data constraint: assume a fixed value for the missing part of the joint distribution. This approach allows the integration of outcomes collected from different surveys, unlike the mainstream method currently in use. Drawing on household surveys from six developing countries where both dimensions are observed, the paper shows that the method systematically outperforms traditional single-survey measures and “mash-up” measures. Monte Carlo simulations further confirm the robustness of the results across a wide range of data-generating scenarios. The findings highlight the value of the proposed method for monitoring multidimensional poverty and suggest that it may also benefit other social indicators facing similar data limitations.