The most concerning signal in MAT’s external-finance section is the sharp fall in foreign direct investment. Net FDI inflow reached only €192.4mn in January–March 2026, down 39.5% year on year. Gross non-resident FDI inflow into Serbia was €369.3mn, down 52.2%. For an economy that has relied heavily on foreign investors to build export capacity, this is one of the most important warning signs in the report.
Serbia’s FDI model has delivered real results. Foreign investors helped develop automotive suppliers, electronics, machinery, rubber and plastics, food processing, logistics and industrial zones. They brought export contracts, equipment, management systems and access to EU supply chains. A slowdown in FDI therefore affects more than capital inflow; it affects future industrial momentum.
The current-account deficit may be lower, but weaker FDI changes the interpretation. A better external balance is healthiest when it comes from stronger exports and services. It is less positive when it comes partly from weaker investment demand or reduced capital inflows. Serbia must avoid a situation in which the balance of payments looks cleaner because fewer companies are investing.
The reasons behind lower FDI may be external and domestic. Higher global interest rates, weak EU demand, geopolitical uncertainty, energy prices and competition from other nearshoring locations all matter. Domestic factors also count: regulation, permitting, labour availability, political risk, infrastructure, energy reliability and rule-of-law perceptions.
The solution is not simply to chase more subsidised factory projects. Serbia needs higher-quality FDI: technology, supplier development, research, energy efficiency, high-value components, industrial services and export platforms with deeper local content. FDI should help Serbia upgrade, not only employ.
The fall in inflows does not mean investors are leaving Serbia. It does mean the easy phase of foreign-led industrial expansion is becoming more difficult. Serbia now needs a stronger domestic investment cycle and a clearer value proposition for foreign investors. The 52.2% drop in gross inflows is the number policymakers should treat seriously.
