Global investments fall to unprecedented levels since 1990s; Serbia still has a good FDI influx

Thanks to previously concluded agreements, the decline in foreign direct investments in Serbia during 2020 is half the global average.

In fact, global investments have dropped to unprecedented levels since the 1990s. Last year, EUR 3 billion of foreign direct investments entered Serbia and the net inflow was EUR 2.9 billion.

In the fourth quarter alone, the FDI influx reached 1.2 billion euro, although a large part, 400 million euro, came from the sale of Komercijalna Banka, which was completed early last year. And together with the 3 billion, investments in 2020 recorded a 20% decrease compared to 2019.

On the other hand, this decline is an exceptional result, considering that foreign direct investment has decreased up to 42% globally.

According to UNCTAD, FDI fell from $1.5 trillion in 2019 to $859 billion last year. Such a low level of global investment influx has not been seen since the 1990s and is about 30 percent lower than in the period following the 2008-2009 global financial crisis.

China has received the world’s largest investments – $163 billion, compared to $134 billion in the U.S. China has also seen FDI growth of 4 percent in 2020.

UNCTAD is also pessimistic about this year’s investments and, due to uncertainty about the pandemic, estimates a further decline of 5 to 10 percent. One reason is that less developed countries will have less money to attract investors due to the high debt to fight the coronavirus.

In recent years, Serbia has emerged as a serious destination for regional foreign direct investments. According to the Development Agency of Serbia, 31 billion euro worth of FDI had arrived in the country since 2007. After a record 3.6 billion in 2019, investments reached 2.9 billion last year.

The entire Balkan region is doing quite well, considering that the drop in FDI in Southeast Europe was 28%, two and a half times lower than the European level. The question is whether this trend will continue.

(Danas, 28.03.2021)



This post is also available in: Italiano

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