Lockdown effect reaches Serbia: Investment inflow totals 1.66 billion euros

About 60 percent of FDI has been invested in tradable sectors, primarily the manufacturing industry

In the first eight months of this year, Serbia has had net inflow of foreign direct investments (FDI) of 1.66 billion euros, which is 28.9 percent less than in the same period last year, the new issue of the MAT magazine said.

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"The fact is that the inflow of FDI to Serbia due to the Covid-19 pandemic decreased compared to last year, but the contraction is weaker in relation to global FDI trends, where as we stated there was a decline in FDI of 49 percent, especially in relation to our European environment," MAT said.

Net inflow of foreign direct investment in Serbia was 677.6 million euros lower in the first eight months than in the same period in 2019. As stated, inflow based on non-resident FDI to Serbia amounted to 1.72 billion euros, which is 807.5 million or 31.9 percent less.

Net inflow of portfolio investments amounted to 1.4 billion euros, or 1.2 billion euros more. Net outflow on the basis of other investments (cash and deposits, financial loans and trade loans) amounted to one billion euros, while in the period January-August 2019, net inflow of 846.4 million euros was recorded.

Among other investments, an increase in deposits of domestic commercial banks abroad in the amount of 457.5 euros million was recorded.

Also, in the period between January and August 2020, there was an increase in net credit liabilities (net increase in financial liabilities) of commercial banks (in the amount of 625.2 million euros) and companies (in the amount of 290.6 million euros), while the government sector recorded a decrease in net credit liabilities in the amount of 60.3 million euros.

Claims on the basis of trade loans (claims based on uncollected exports of goods) increased by 672.9 million euros, while on the same basis a decrease in liabilities (on the basis of unpaid imports of goods) was recorded in the amount of 808.4 million euros).

MAT experts say that net inflow of FDI to Serbia in the period January-August this year enables for a full coverage of the current account deficit (103.7 percent). According to initial estimates, about 60 percent of FDI is invested in tradable sectors, primarily manufacturing (32.9 percent) and transport (20.7 percent), followed by construction (13.7 percent) and the financial sector (7.0) percent.

Most investments in Serbia came from European countries (about 68.4 percent from EU countries and about 5.3 percent from Russia) and Asian countries (about 20.2 percent), primarily from China (about 18.9 percent).

(Telegraf Biznis)