Foreign direct investment (FDI) into Serbia fell by 67.5% in the first five months of 2025, compared to the same period in 2024, according to the latest balance of payments report from the National Bank of Serbia (NBS).

The slump in FDI raises concerns over Serbia’s economic trajectory, as foreign investment has been a key engine of growth, job creation and export expansion.

According to the NBS, net FDI inflows dropped to €631mn between January and May, down from €1.94mn in the same period of 2024. Gross inflows fell 46% to €1.19bn, while outflows more than doubled to €562mn.

The downturn follows months of student-led protests triggered by a fatal roof collapse at the Novi Sad railway station in November 2024. The tragedy became a catalyst for mass demonstrations against corruption and public safety failures, leading to the resignation of the Prime Minister in January.

President Aleksandar Vucic and his government have blamed the protests for deterring investors and tourists. “Investors do not want to invest in a country where the normal life and work of people is blocked every day,” Finance Minister Siniša Mali said in April, after the IMF lowered Serbia’s growth forecast.

After achieving a record €5.1bn in FDI and 3.9% economic growth in 2024, Serbia has seen momentum stall in the first half of 2025. The economy expanded just 2% year-on-year in the first quarter, down from 3.3% in Q4 2024, as both domestic unrest and weakening external demand took a toll.

Key export sectors such as automotive components have been hit by slowing demand from the eurozone. At home, industries like retail, hospitality and tourism have suffered amid frequent street protests and blockades.

Monthly data show the investment picture deteriorated sharply in April, when Serbia recorded a net FDI outflow of €171mn. May brought a partial recovery, with a net inflow of €230mn — the highest monthly figure this year — but not enough to reverse the overall decline.

Independent think tanks, including Macroeconomic Analysis and Trends (MAT), have echoed concerns over Serbia’s investment climate. MAT estimated a 76.7% year-on-year drop in net FDI in the first four months of 2025, citing rising labour costs, eurozone weakness and an exceptionally strong 2024 base.

Still, MAT pointed to one potentially positive trend: equity investments — generally more stable than intercompany loans — made up over 91% of total FDI inflows so far this year.