Serbia attracts €11.3bn in FDI in last three years

Serbia attracts €11.3bn in FDI in last three years
By bne IntelliNews April 17, 2023

Over the past three years, Serbia has emerged as a favourable destination for foreign direct investment (FDI), attracting a total of €11.3bn, the country’s central bank said on April 16.

The country's success in attracting FDI is a result of its stable macroeconomic environment, resilient banking sector, continued economic growth, prudent fiscal management and commitment to energy sector reforms.

A significant portion of these investments, totaling €6.2bn, has been directed towards export-oriented sectors, reflecting the country's efforts to boost its economy through international trade, the statement said after governor Jorgovanka Tabakovic, met with leading global investors during the spring meetings of the International Monetary Fund (IMF) and the World Bank.

One of the key factors contributing to Serbia's success in attracting FDI is the uninterrupted investment cycle in the country. This has created a favorable environment for investors, providing them with stability and confidence in the business climate, Tabakovic said. As a result, Serbia is poised to achieve at least €42bn in exports of goods and services in 2023.

The NBS governor also pointed to other factors indicating Serbia is an attractive investment destination. 

Firstly, the country's record foreign exchange reserves of €21.4bn at the end of March indicate a stable macroeconomic environment and sound monetary policies, she said. 

Serbia's banking sector has been recognised for its "strength and resilience" in the face of external shocks, with prudent regulations and supervision, and has been successful in supporting economic growth by providing financing and other banking services to businesses and individuals.

Serbia has also witnessed continued economic growth, with expectations of a return to a rate of 4%. This positive economic performance has been supported by the implementation of new fiscal rules and sound public finances, Tabakovic said. 

Serbia has been successful in reducing its public debt as a percentage of gross domestic product (GDP) to 51.1% in February, which has also been viewed positively by investors. Despite high capital investments, the country is expected to further reduce its fiscal deficit. 

Serbia has also been proactive in implementing reforms in the energy sector, with a focus on increasing the share of renewable energy sources, in line with global efforts towards sustainable development and environmental protection, according to the central bank. Such reforms have been viewed positively by investors, it said, as they reflect Serbia's commitment to modernising its energy sector and promoting environmentally friendly practices.