{"id":11418,"date":"2025-07-27T13:24:51","date_gmt":"2025-07-27T12:24:51","guid":{"rendered":"https:\/\/seecheck.org\/?p=11418"},"modified":"2025-07-31T14:12:00","modified_gmt":"2025-07-31T13:12:00","slug":"the-decline-in-foreign-investment-was-predicted-before-the-canopy-fell","status":"publish","type":"post","link":"https:\/\/seecheck.org\/index.php\/2025\/07\/27\/the-decline-in-foreign-investment-was-predicted-before-the-canopy-fell\/","title":{"rendered":"The Decline in Foreign Investment Was Predicted Before the Canopy Fell"},"content":{"rendered":"\n

Original article<\/em><\/a> (in Serbian) was published on 25\/7\/2025; Author: Stefan Janji\u0107<\/em><\/p>\n\n\n\n


“We have lost 41 percent of foreign direct investment due to the blockade,”\u00a0President\u00a0Aleksandar Vu\u010di\u0107 said\u00a0<\/strong>in the “Hit Tweet<\/a>“, talk show broadcast on Pink television. Before that,\u00a0in April<\/a>, he stated that the decline in investments was directly related\u00a0to “the blockade attack<\/strong>\u00a0: “It’s about people’s fear, the entire economic activity has slowed down, and no one else is responsible but those who tried to destroy the country.” Similar\u00a0statements were made by\u00a0Sa\u0161a Stevanovi\u0107, State Secretary of the Ministry of Finance, who – poetically – added that\u00a0“capital is a timid bird. “<\/a><\/a><\/p>\n\n\n\n

But was this “bird” scared off by the whistles of the protesters, or is there a broader problem? Although we are not claiming that the current political crisis has not had an impact on foreign direct investment (FDI), we draw attention to\u00a0two facts: the decline in FDI was predicted even before the canopy fell, and comparing 2025 with 2024, although logical, also carries with it one big “but”. We reviewed data from the National Bank of Serbia (NBS), reports from the International Monetary Fund (IMF), and spoke with\u00a0Predrag Bjeli\u0107, a professor at the Faculty of Economics in Belgrade, who tells Traga\u010d that the biggest cause of the decline in FDI is “global geoeconomic turbulence”.<\/p>\n\n\n\n

Between two Januar<\/strong>ies<\/h2>\n\n\n\n

When the president first complained this year that demonstrations and blockades were disrupting\u00a0the country’s economic stability<\/strong>, the statistical reports for January were not even in sight. The president\u00a0announced\u00a0that – based on 21 days of measurements – the beginning of January 2025 was worse in terms of FDI than in 2024, and even worse than in 2023. When the month ended, we saw that it was worse than\u00a0January 2024<\/a>, but\u00a0not\u00a0<\/strong>January 2023<\/a>\u00a0.<\/p>\n\n\n\n

However, how fair is this comparison? In response to a question from Bloomberg Adria, the NBS\u00a0stated<\/a>\u00a0that inflows in the first month of 2025 did decline, \u201cwhereas it is important to point out that the amount of inflows in January of the previous year was above the usual average for that period of the year.\u201d Not only was the previous January above average, but the entire year was also\u00a0a record<\/strong>. In\u00a0December,<\/a>\u00a0the Serbian President boasted that \u201c2024 is the best year for Serbia in terms of attracting foreign investment.\u201d<\/p>\n\n\n\n

In this light, although it is logical to compare two adjacent years, one should keep in mind\u00a0the “high base effect”<\/strong>, which is presented in\u00a0the Nedeljnik article<\/a>\u00a0on this topic.<\/p>\n\n\n\n

How are things?<\/strong><\/p>\n\n\n\n

We reviewed the NBS balance of payments <\/strong>reports<\/a> for the first five months of 2025, and compared them with data for the period from 2020 to 2024. January, for example, was significantly worse than 2024, but it was still better than 2020, 2022, and 2023. You can view detailed data in this interactive chart:<\/p>\n\n\n\n

\"chart<\/figure>\n\n\n\n

The biggest problem was observed in\u00a0April of this year<\/strong>, when\u00a0a net outflow of investments\u00a0was recorded. Overall, it is true that in the context of FDI, this is, for now, the worst in the previous six years. Although it seems simple (\u00a0in the words<\/a>\u00a0of former Minister Neboj\u0161a Stefanovi\u0107) to connect \u201csome persons with some areas\u201d and \u201csome persons with other persons\u201d, and conclude that the decline was due to blockades, it is clear that the decline was predicted even before there was any indication that demonstrations would occur.<\/p>\n\n\n\n

Forecasted decline<\/strong><\/h2>\n\n\n\n

The IMF’s December 2024<\/a>\u00a0report for Serbia\u00a0projected a decline in the share of foreign direct investment in GDP\u00a0in 2025 and 2026.<\/strong>\u00a0The decline in net inflows was also predicted in last year’s\u00a0July<\/a>\u00a0IMF report,\u00a0three months before the fall of the canopy<\/strong> and the start of protests. The new report, published\u00a0this July<\/a>\u00a0, notes a decline in foreign direct investment, noting that the authorities point to the protests as the leading cause of the decline. It adds, however, that\u00a0other factors<\/strong>\u00a0should be taken into account , such as global uncertainties, and that the projected decline (until 2030) is “mainly caused by a continued decline in inflows to the manufacturing sector, as well as to other sectors in general,” and that “structural weaknesses continue to play an important role in foreign investors’ decisions.”<\/p>\n\n\n\n

The same page of the new report (76) shows the differences between Serbia and its regional competitors in terms of\u00a0investment barriers<\/strong>. Serbia’s position is good in the context of electricity, tax rates ,and workforce education, but it is worse in the domains of corruption, labor regulations, political stability, and tax administration.<\/p>\n\n\n\n

Bjeli\u0107: The leading cause is global geoeconomic turbulence<\/strong><\/h2>\n\n\n\n

To better understand what factors influenced the decline in FDI, and what role blockades and protests play in this, we turned to\u00a0Predrag Bjeli\u0107<\/strong>, a professor at the Faculty of Economics in Belgrade and an expert in international trade.<\/p>\n\n\n\n

In his response to Traga\u010d, he states that the biggest cause of the decrease in FDI is\u00a0global geo-economic turbulence<\/strong>. “The offshoring phase has ended, when the EU sent FDI to countries close to it, where Serbia was suitable for investment. Also, costs in Serbia have increased significantly and that is the reason why some investors are leaving. Blockades did play a role, but to a smaller extent,” says Bjeli\u0107.<\/p>\n\n\n\n

A journalist from Nedeljnik<\/a>\u00a0also spoke with experts about the causes of the decline in FDI, so we recommend that text for more details.<\/p>\n","protected":false},"excerpt":{"rendered":"

Original article (in Serbian) was published on 25\/7\/2025; Author: Stefan Janji\u0107 “We have lost 41 percent of foreign direct investment due to the blockade,”\u00a0President\u00a0Aleksandar Vu\u010di\u0107 said\u00a0in the “Hit Tweet“, talk show broadcast on Pink television. Before that,\u00a0in April, he stated that the decline in investments was directly related\u00a0to “the blockade attack\u00a0: “It’s about people’s fear, […]<\/p>\n","protected":false},"author":5,"featured_media":11419,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[316],"tags":[282,609,277,28],"class_list":["post-11418","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fact-checks","tag-economy","tag-fdi","tag-protests","tag-serbia"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/seecheck.org\/index.php\/wp-json\/wp\/v2\/posts\/11418","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/seecheck.org\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/seecheck.org\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/seecheck.org\/index.php\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/seecheck.org\/index.php\/wp-json\/wp\/v2\/comments?post=11418"}],"version-history":[{"count":1,"href":"https:\/\/seecheck.org\/index.php\/wp-json\/wp\/v2\/posts\/11418\/revisions"}],"predecessor-version":[{"id":11420,"href":"https:\/\/seecheck.org\/index.php\/wp-json\/wp\/v2\/posts\/11418\/revisions\/11420"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/seecheck.org\/index.php\/wp-json\/wp\/v2\/media\/11419"}],"wp:attachment":[{"href":"https:\/\/seecheck.org\/index.php\/wp-json\/wp\/v2\/media?parent=11418"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/seecheck.org\/index.php\/wp-json\/wp\/v2\/categories?post=11418"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/seecheck.org\/index.php\/wp-json\/wp\/v2\/tags?post=11418"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}