Net direct foreign investments in Serbia amounted to EUR 201 million this May, which is around 26% less than in the same month last year, as announced by Ivan Nikolic, a senior research associate at the Economics Institute of Belgrade.
He told Beta that, in the first five months of 2020, total net direct foreign investments in Serbia had amounted to EUR 1.253 billion.
– The investments are lower by 11.7%, or EUR 166 million, than in the same period last year – Nikolic said.
He added that the drop had been expected, due to the economic crisis caused by the COVID-19 pandemic.
Nikolic says that it is good that, when investments are dropping, the current account deficit is reduced, and is 4.5% lower than in May 2019.
– The current account deficit is lower primarily due to a lower outflow of money through dividends and profit re-investments in Serbia – Nikolic said.
He said that the current account deficit had been lowered due the citizens of Serbia spending less as tourists abroad.
According to him, that is an advantage now, because the current account deficit is financed from the inflow of foreign investments, which are now reduced.
He pointed out that the state was making efforts to compensate for the drop in net direct foreign investments by increasing capital budget expenditures.
– Capital expenditures are higher by EUR 239 million in the first five months of the current year and have exceeded 5% of the GDP – Nikolic said.
He added that the state was thereby trying to maintain a high level of investments that impact the economic growth at the time when foreign direct investments were dropping.