IMF: Serbia alone counts for more than half of total FDI stock in the region

The International Monetary Fund says that Serbia alone counts for more than half of total FDI stock in the region, realized in the six economies of the Western Balkans (WB6) in the past ten years.

The rest is split between the other five countries roughly corresponding to their relative size, it is added in the IMF's working document titled “Foreign Direct Investment in New Member States of the EU and Western Balkans”, published on the official website of this international institution.

With a late start in transition, most FDI inflows to the WB region took place in the last decade reflecting significant recent policy efforts geared to court foreign investors, the IMF says.

Their average per capita FDI stock is not surprisingly lower than the NMS, although scaled by GDP, the average FDI stock in WB countries is actually higher than the NMS reflecting small size of most economies in this region, the IMF notes.

The document says that the WB region’s GDP is about a fifteenth of the NMS regional GDP.

The IMF estimates that these eleven countries, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia, that joined the EU in 2004 or after, also known as the New Member States (NMS), have attracted a cumulative total gross FDI of almost 700 billion as of end-2016.

A sustainable scaling up of FDI in these regions will hinge on stronger institutions, better infrastructure and labor skills, the IMF believes, adding that fiscal revenues lost to implicit and explicit subsidies are resources that can be used to invest in skills, education and infrastructure.

For the WB countries, largest partial gains come from improving institutions, and for the NMS, gains are estimated to be similar from reforming institutions, improving infrastructure and addressing skills shortage.

The WB region is also part of the China’s Belt and Road initiative which holds prospects for greater connectivity between the East and the West cementing the region’s reputation as a gateway to Europe and offering prospects for investors outside Europe, it is added.

Međunarodni monetarni fond - MMF Beograd

International Monetary Fund

IMF

foreign direct investments in Serbia

FDI

FDi in Western Balkans

Western Balkans

Foreign Direct Investment in New Member States of the EU and Western Balkans

Belt and Road initiative