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Serbia, One billion euros of foreign investment in construction

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Last year was a record for the value of cross-border investments of 4.4 billion euros

In 2022, Serbia had 4.4 billion euros in foreign direct investments. With an annual increase of 13.6 percent compared to the previous record in 2021, a new “champion” was achieved in the inflow of cross-border capital. Data from the National Bank of Serbia on this are still preliminary. For now, those for the first three quarters are accurate, showing that around three billion euros were invested here in that period. The largest investment was in the processing industry, a total of 1.3 billion euros, and within this group the most, 443 million, was in the production of rubber and plastics. This is followed by investments in the production of motor vehicles of almost 300 million euros, the production of basic metals 123 million, and the food industry of 116 million.

In the first three quarters of last year, one billion euros were invested in the construction sector, and real estate deals worth 226 million should be added to the package. Investments in trade were also large, amounting to around 300 million euros. Looking at the countries from which the capital comes, there are no surprises. And there it is clear that the European Union is our main economic partner, because investors there have invested 1.6 billion euros. Investors from other European countries invested 608 billion. Most from Great Britain, 260 million euros, Switzerland 162 million and the Russian Federation 57 million. China is still a big investor with one billion euros, and Japan with around 200 million. 95 million euros arrived from the USA.

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The NBS states that since 2016, Serbia has been recording a continuous increase in FDI inflows. This growth trend temporarily slowed down during 2020 as a result of the first shock since the outbreak of the corona virus pandemic, but again during 2021 the inflow of FDI recorded a record amount at that moment of 3.9 billion euros, so that in the previous three years the total inflow was realized of 11.3 billion. In addition, the net inflow of FDI since 2015 fully covered the current deficit of the balance of payments, contributing to the long-term sustainability of the external position of the Republic of Serbia. Below is a tabular overview of FDI inflows to Serbia from 2016 to 2022.

They state that about 60 percent of total FDI was directed to tradable sectors, mostly to the manufacturing industry (43.5 percent), but also to construction (33.3) and trade (10).

“The inflow of FDI remained stable despite the aggravation of geopolitical tensions and the global economic crisis.” After a temporary slowdown that was registered during March and April 2022, a complete recovery and a return to the trend before the outbreak of the conflict in Ukraine and reaching a new record in terms of FDI inflows have been observed since May. The most significant factor affecting the high inflows of FDI is above all the achieved and preserved macroeconomic stability despite the uncertainties in the international environment. A favorable business climate, a qualified workforce, established free trade agreements with many countries, as well as continued investment in infrastructure development, additionally contributed to the continuous inflow of FDI”, according to the NBS.

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