Foreign direct investment into Serbia declined significantly during the first half of 2026, while faster corporate lending and stronger economic growth point to a potentially changing mix of financing for domestic investment.
Balance-of-payments data show direct-investment liabilities of about €1.23 billion in January-June, compared with approximately €1.73 billion in the first half of 2025. The figures represent a decline of around 29% in inward direct-investment flows.
The reduction is notable because foreign direct investment has been a central component of Serbia’s economic model, with foreign manufacturers, mining companies, infrastructure operators and service groups providing capital for investment and contributing to employment, technology and export capacity. A weaker inflow of foreign capital can therefore affect the financing structure of the economy even while overall economic growth is accelerating.
Foreign investment data require broader context
The first-half figures do not establish that foreign investors are withdrawing from Serbia. FDI flows can vary substantially from month to month, while individual investment projects may be concentrated in particular periods of the year. The balance-of-payments measure can also be influenced by intercompany transactions and reinvested earnings, and direct-investment liabilities should not be interpreted as equivalent to net foreign direct investment.
Serbian companies also make investments abroad, while the NBS financial account records movements in both foreign assets and liabilities. The first-half decline in inward flows therefore needs to be viewed within the broader structure of Serbia’s international investment flows.
Corporate borrowing expands alongside economic growth
The weaker FDI performance has coincided with a period of stronger domestic financing activity. Corporate bank lending is rising rapidly, while Serbia’s GDP growth accelerated to 3.6% in the second quarter of 2026. At the same time, fiscal spending and infrastructure investment continue to contribute to economic activity, creating a combination in which domestic banks, companies and the state may be assuming a larger role in financing investment.
The developments raise the possibility of a shift in Serbia’s investment-financing mix. A growth model relying heavily on foreign equity capital carries different financial characteristics from one increasingly supported by bank lending and external borrowing.
Financing structure creates different risk exposures
Bank debt and other forms of borrowing require repayment regardless of whether an investment ultimately generates the expected returns, while equity investors bear a larger share of business risk. If inward FDI increases again during the second half of 2026, the first-half reduction could prove temporary. If weaker inflows continue, the year will provide a test of Serbia’s ability to maintain investment growth with less dependence on the foreign-capital inflows that have supported previous phases of economic expansion.
