According to preliminary data from the National Bank of Serbia (NBS), Serbia attracted approximately €2.3 billion in foreign direct investments (FDI) in the first half of this year.
In March, state officials projected that Serbia would receive €5 billion in FDI in 2024, surpassing last year’s record of €4.5 billion. This would bring the total foreign investment close to the remittances received, which nearly reached €5 billion by the end of last year. However, remittances have been arriving at a slower pace this year compared to last. From January to May, remittances totaled €2.08 billion, down 2% from the €2.12 billion received during the same period last year.
May was the weakest month for remittances this year, with €459 million sent, nearly 10% less than the €506 million received in May of the previous year.
In the NBS’s May Inflation Report, the bank projected remittances for this year to match last year’s level, around €5 billion.
Foreign direct investments have been arriving faster than last year. The central bank reported in July that FDI inflows amounted to €2 billion gross, or €1.7 billion net, in the first five months of this year, a 10% increase from the same period last year.
Preliminary data for the first six months indicate that FDI reached €2.3 billion. With available data for five months of remittances, it is anticipated that the difference of approximately €300 million between remittances and FDI may balance out. This suggests that the two indicators are approaching parity.
Ideally, the use of remittances for investment purposes rather than consumption would be beneficial. Nenad Jevtović, director of the Institute for Innovation and Development, highlighted that remittance spending patterns remain constant. According to IMF data, 67% of remittances are used for daily expenses, 24% for real estate, and only 1% for investments. Jevtović noted that most people working abroad do so for employment rather than business creation, emphasizing the need for continued reliance on foreign direct investments for GDP growth, job creation, and technological advancement.
