In the first nine months of this year, more remittances arrived in Serbia than in the same period last year. According to data from the balance of payments of the National Bank of Serbia with a cut in September, the value of remittances this year in nine months reached 3.92 billion euros, while only the remittances sent to Serbia by our workers from abroad were worth 2.97 billion euros.
For the sake of comparison, last year in the same period, 3.76 billion euros of remittances arrived, that is, 2.85 billion euros from employees alone. In short, this year there is a growth in remittances of four percent compared to the nine months of the record year 2022.
When compared with the level of foreign direct investments, which in 2022 amounted to around 4.4 billion euros, it seems that this year’s remittances from abroad could exceed this amount.
Most of that money goes to consumption, then to real estate, and very little to investments.
Branko and his wife have been living in Frankfurt for eight years and the two of them are among those who send part of the money they earn to their family in Serbia.
“Both my parents and hers live in Serbia. Whenever necessary, we send money to help them. With the pensions they receive, they somehow make it through the month, but extraordinary expenses also happen, so we always cover it,” Branko said.
He says that this help is not always in the form of money, that he often sends some medical material that dad needs, and that almost everyone who is from Serbia, with whom he is in contact, helps their own, that some of them send money every month, and some periodically.
The President of Serbia, Aleksandar Vučić, said in the middle of the year that the level of foreign direct investments reached 2.34 billion euros, which, he said, was above the “record” level of 2022. Shortly after that, he also stated that he expects the level of direct foreign investments in Serbia to reach four billion euros in 2023.
Economist and director of the Institute for Development and Innovation Nenad Jevtović believes that remittances this year have already “won” the race to reach four billion euros.
“Although they officially reached EUR 3.9 billion in September, remittances reached EUR four billion a month before. The reason why I say this is that not all remittances come through official channels that the NBS can track, despite the appropriate methodology of the central bank that assesses the informal part as well. A huge part of the remittances are brought by relatives and given ‘in the hands’. Foreign direct investments (FDI), on the other hand, official statistics follow much more precisely because they take place through formal channels,” explains Jevtović in an interview.
When it comes to future inflows based on remittances, NBS analysts expect that it will range around five percent of GDP in the coming years as well, while maintaining a high geographical and project spread, as well as that the largest part of the inflow will still be directed to export-oriented sectors.