UNCTAD: Foreign Direct Investment Inflow to Serbia Amounts to USD 3.44 Billion

Serbia attracted USD 3.44 billion in foreign direct investments (FDI) in 2020, which is over 50% of the total FDI in South-East Europe in the year of the Covid-19 pandemic, which amounted to USD 6.11 billion, according to today’s report by the United Nations Conference on Trade and Development (UNCTAD).

According to the UNCTAD document, Serbia is third among the economies in transition when it comes to FDI inflow in 2020, with Russia and Kazakhstan ahead with USD 9.7 billion and USD 3.9 billion respectively.

Manufacturing was the sector hardest hit by the FDI downturn, including the machinery and equipment, metallurgy, and rubber and plastic industries. Despite the interruptions in trade and GVCs, the automotive industry still registered some expansions, such as that of the Magna Seating plant and of Cooper Tire & Rubber (United States).

In the services sector, too, the decline in FDI affected a broad range of activities.

Under the scheme of the Development Agency of Serbia for co-financing investment projects, 20 contracts were signed during 2020 with companies planning to invest about USD 1.4 billion and create close to 5,000 jobs.

Also, according to the UNCTAD, new tools to keep free economic zones attractive were introduced, including health protection measures, lower rents and a shift of transactions and meetings online as much as possible.

The pandemic also acted as a catalyst to accelerate the Supplier Development Programme, started in 2019, which seeks to improve the benefits of FDI.

Although the focus of investment promotion remains capital-intensive projects, especially in the automotive cluster, there is a marked shift from activities with lower value added to projects related to innovation, high-tech segments, digitalization, and research and development, according to the UNCTAD report.

The UNCTAD expects global FDI to be partially compensated for in the current year thanks to the recovery in Asia.

Razvojna agencija Srbije

United Nations Conference on Trade and Development

UNCTAD

Development Agency of Serbia

foreign direct investments

FDI

production

services

Supplier Development Programme