Diaspora brings in more money than foreign investment - Economy - Time Weekly

In the first nine months of this year, Serbia received more remittances than at the same time last year. According to the balance of payments data of the National Bank of Serbia as of September, the value of remittances in the first nine months of this year reached 3.92 billion euros, while only the remittances sent by our employees from abroad to Serbia amounted to 2.97 billion euros. In comparison, last year at the same time 3.76 billion euros of remittances came in, with 2.85 billion euros from workers alone. Briefly, there is a 4 percent increase in remittances this year compared to the record nine months of 2022. Compared to the level of foreign direct investment of around €4.4 billion in 2022, it seems likely that remittances from abroad could exceed that amount this year.

How are remittances spent? As Vreme has already reported, most of this money is spent on consumption, then on real estate, and very little on investment. Our interlocutor also told us about it. Branko and his wife have been living in Frankfurt for eight years, and they are both the ones who send some of the money they earn to their family in Serbia. "My parents and her parents live in Serbia.

Money remittances exceed foreign direct investment. Serbian President Aleksandar Vucic said mid-year that the level of foreign direct investment reached 2.34 billion euros, which he said was above the "record" level of 2022. Shortly afterward, he also stated that he expects the level of foreign direct investment in Serbia to reach four billion euros in 2023. Economist and director of the Institute for Development and Innovation Nenad Jevtoviћ believes that remittances have already "won" this year in the race to four billion euros. "Although they officially reached 3.9 billion euros in September, remittances had reached four billion euros a few months earlier. The reason why I say this is that not all remittances come through formal channels that can be monitored by the National Bank of Serbia, despite the relevant methodology of the central bank, which evaluates the informal part as well. A huge part of remittances is made through relatives, goes "in hand". On the other side, official statistics track foreign direct investment more accurately because it goes through formal channels," explains Jevtoviћ in an interview for Biznis.rs.

With regard to future remittance receipts, analysts at the National Bank of Serbia expect them to amount to about 5 percent of GDP in the next years, with a continued high geographical and project spread, and that most of the receipts will be directed to export-oriented sectors.

B.G./Biznis.rs

Read news, analysis, commentary and interviews at www.vreme.com.