In Serbia, net direct foreign investments amounted to 201 million euros in May, which is about 26 percent less than in the same month last year, said today a senior research associate at the Institute of Economics in Belgrade, Ivan Nikolic.
He told Beta that in the first five months of 2020, total net foreign direct investments in Serbia amounted to 1.253 billion euros.
“Those investments are 11.7 percent or 166 million euros less than in the same period in 2019,” Nikolic said.
He added that the decline in investments was expected due to the economic crisis, caused by the Covid-19 virus pandemic.
Nikolic said that it is good that when investments fall, the current account deficit decreases, which is 4.5 percent lower than in May last year.
“The current account deficit has been reduced primarily due to a smaller outflow of money based on dividends and reinvestment of profits in Serbia,” Nikolic said.
He said that the current account deficit was “narrowed” due to lower tourist spending of Serbian citizens abroad.
According to him, this is a mitigating circumstance because the current account deficit is financed from the inflow of foreign investments, which have now been reduced.
He pointed out that the state is making efforts to compensate in terms of value for the decline in net foreign direct investments by increasing capital expenditures from the budget.
“Capital expenditures are higher by 239 million euros in the first five months of this year and exceeded five percent of the gross domestic product (GDP),” Nikolic said.
He added that in this way, the state is trying to maintain a high level of investment, which affects economic growth, when foreign direct investments fall, Danas reports.
