Serbia experienced a significant 67.5% decrease in net foreign direct investment (FDI) inflows in the first five months of 2025 compared to the same period in 2024, according to the National Bank of Serbia’s latest balance of payments report.
FDI inflows fell from €1.943 billion in early 2024 to just €631 million in the same period this year. This decline was driven by a sharp drop in gross inflows and a doubling of investment outflows from Serbia.
Monthly trends: Positive inflows marred by April outflow
From January to March 2025, Serbia saw steady net positive FDI inflows: €197 million in January, €171 million in February, and €204 million in March. However, April recorded a reversal with a net outflow of €171 million, the only month with a negative balance during the period. May recovered with the highest monthly net inflow of €230 million.
Despite May’s improvement, the overall FDI performance for the first five months remains substantially weaker than in 2024, mainly due to April’s outflows combined with lower inflows.
Government blames political unrest
Finance Minister Siniša Mali linked the decline in investment to recent domestic unrest and blockades, stating that violence and public disruptions have damaged Serbia’s image as a safe investment destination, deterring investors.
Economic analysts identify multiple causes
Reports from “Macroeconomic Analysis and Trends” (MAT) and “Quarterly Monitor” (QM) confirm the drastic FDI drop. MAT notes a 76.7% decline in net inflows during the first four months of 2025 compared to 2024. QM highlights a halving of inflows in the first quarter relative to last year.
Key reasons include a high base effect from record inflows in early 2024 (partly due to one-time Telekom asset sales), ongoing political uncertainty, rising labor costs, and slow eurozone growth reducing Serbia’s investment appeal.
MAT emphasizes a double impact: nearly 50% lower inflows and a 141.6% increase in outflows.
Positive note on investment structure
On the positive side, MAT observes that equity investments now make up 91.7% of the reduced inflows, as opposed to intercompany loans. This shift is favorable because equity investments do not increase Serbia’s gross debt burden.
