Serbia’s external financing structure shifted significantly in the second quarter of 2026, as net portfolio investment inflows reached approximately €3.9 billion, substantially exceeding foreign direct investment during the period.
Gross foreign direct investment stood at around €843.5 million in the quarter, while net FDI reached €633.9 million. Despite the stronger role of portfolio capital in the second quarter, FDI remained a significant source of external financing. During the first six months of 2026, gross FDI inflows exceeded €1.2 billion, with the composition continuing to include both reinvested earnings and equity investment.
Sovereign and corporate bond issuance drives portfolio inflows
Capital-market transactions accounted for a major share of the second-quarter financing activity. Serbia’s sovereign raised approximately €3 billion equivalent, while corporate issuers placed around €1.95 billion equivalent in bonds on international markets. The scale of bond issuance contributed to the sharp increase in portfolio investment during the quarter, with tradable securities representing a substantially larger financing channel than FDI over the same period. At the same time, proceeds from the new securities were partly directed toward the repayment of existing obligations. Financial credits therefore recorded a €1.6 billion net outflow during the quarter.
Refinancing reshapes Serbia’s external liabilities
The movement in financial credits reflects a change in the structure of external liabilities rather than simply an increase in new borrowing. Existing bank and short-term obligations are being replaced in part by marketable securities carrying longer maturities. The resulting financing mix gives international capital markets a greater role in Serbia’s external funding structure. Portfolio investment can adjust more rapidly than FDI in response to changes in interest rates, geopolitical conditions and investor appetite for emerging-market assets.
FDI, by comparison, remains tied to individual projects and reinvested corporate earnings, while portfolio capital is more directly exposed to changes in global financial-market conditions. Serbia’s high reserves and improving sovereign profile provide protection within this changing financing structure, while the growing importance of portfolio inflows adds greater relevance to developments in international capital markets.
