Remittances and foreign investments: Expected influx of 5 billion EUR in 2016

Investments have been continuously growing since the beginning of the year, as have the remittances from abroad – says the National Bank of Serbia. FDIs have also grown, by 6.5%, and there is available capital for export sector.

By the year end, Serbia should receive almost 5 billion EUR worth of foreign direct investments and in diaspora remittances. According to the data collated by the National Bank of Serbia (NBS), since the beginning of this year until the end of June, a total of 830.8 million EUR of foreign direct investments have been made in our country which is 6.5% more than in the same period last year. The NBS says that such FDI influx is a testimony to the positive attitude that investors have about long-term investments in our country. It is expected for Serbia to receive 1.6 billion EUR worth of FDIs by the end of this year. The remittances from abroad amounted to 1.1 billion EUR and it has been estimated that they will amount to around 3 billion EUR by the year end.

The investments mostly came from the EU countries, just like last year, and were spread across numerous projects in different economic branches. Most of the money went to the processing industry, financial sector, construction, commerce, transport and telecommunications.

“Investments should be primarily spread around the export orientated sectors which would contribute to a sustainable economic growth in the next few years. Continuation of the structural reforms, further improvement of the business and investment environment, the recovery of our trading partners and the progress in the EU accession process are expected to give crucial contribution to the FDI influx”, the NBS states.

On the other hand, 331.3 million EUR left the country since the beginning of the year which was mostly spent on purchasing securities. This is a result of the reaction that foreign investors have had towards the emerging markets, like ours, following the normalization of the monetary policy exercised by the American Federal Reserve. Of course, the turbulence surrounding Brexit has also affected the situation. However, the situation is changing for better slowly but surely.

According to the NBS data, domestic investors have also boosted their investments in purchasing mainly foreign debt securities which, also, contributed to the outflow of foreign currency. In the last three months, Serbia paid a total of 110.1 million EUR to foreign investors on the account of interest rates alone. The situation has been changing and these investors are now increasingly focusing on the domestic market.

– The investments, mainly the private ones, were the key driving force behind Serbia’s economic growth last year and the same is expected this year – the NBS says.

The production and export results of the Serbian processing sector also testify to the benefits of increased investments. In 2015, two thirds of the processing companies recorded production growth, and 20 out 23 processing sectors recorded higher export.

DEBT PAID BACK

Domestic companies, the state and financial institutions paid back 250.9 million EUR worth of loans to foreign creditors. The banks paid the most – 196.5 million EUR – while the companies and the state paid back 25.7 million EUR and 21.5 million EUR respectively on the account of cross-border loans

(Večernje Novosti, 04.09.2016)

This post is also available in: Italiano

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