03. Jan 2022
Photo: Jolanda Korać

If a word of the year was chosen in Serbia – the word investments would definitely carry this title for 2021 as well. Not only because we have heard it so many times over the past 365 days, but also because of the impressive numbers that clearly show how much and what has been invested in Serbia in the last year, despite the uncertain circumstances caused by the pandemic. Of these, as well as all other economic balance figures, you may feel dizzy when doing an interview with the Minister of Finance by the end of the year. Nevertheless, these figures are the best indicator of economic growth and business climate that marks Serbia as one of the most attractive investment locations in the world. Serbia's interest is to attract even more investments in the coming period, says Minister of Finance Siniša Mali in an interview with our magazine. He explains why we should be optimistic about the year 2022, which economic sectors have the greatest potential for new investments, and what is particularly appealing for the new building investments.

Now, at the end of the year, when we summarize the overall economic balance, how satisfied are you with the economic situation in the Republic of Serbia?

We really should be satisfied and proud of everything we have accomplished with the economic plan. In the difficult and uncertain times of the coronavirus pandemic, and in a situation where the whole world is facing the economic consequences of that pandemic, we are achieving excellent results. The results are significantly better than we expected at the beginning of the year, which is why the rate of our economic growth has been revised upwards, to seven percent. Also, our public debt is absolutely under control and it is planned to reach up to 58.2 percent, which means that it will not exceed 60 percent set by Maastricht. Unemployment is at the level it was before the pandemic, and the average net salary in the period January-September increased by 5.6 percent in real terms and amounted to 64.487 dinars. At the same time, in the first nine months of this year, industrial production grew by 7.3 percent, and the increase in coverage of imports by exports of 76.6% was also recorded. So, thanks to our successful economic policy and the fact that we have opened more than 250 factories throughout Serbia in the last seven years, we contribute to the coverage of imports by exports and become less and less dependent on imports. All this is only a part of concrete indicators, which testify to how strong and stable our economy is and how optimistically we are entering 2022.

The recently passed budget for 2022 includes a record 486 billion dinars ($4.79 billion) for capital investments, among other things. What kind of investments are we talking about?

In 2022, record capital project allocations will continue, including those that have already commenced and some that have yet to begin. The budget set aside 485.8 billion dinars for that purpose, i.e. as much as 7.3 percent of GDP, and those funds are, among other things, intended for the construction of highways, railways, bridges, hospitals, health centers, ecology, and environmental protection. Here are just a few examples. The budget for next year allocates funds for the Fruskogorski corridor, the Moravian corridor, the section Preljina-Pozega, the highway Belgrade-Sarajevo, for the construction of the road Ruma-Sabac-Loznica, for the Danube highway, the section of the highway Belgrade-Zrenjanin, the fast road Backi Breg-Kikinda, the section of the highway New Belgrade-Surcin, section Nis-Plocnik, for bypasses, bridges, and tunnels, for the project of the Hungarian-Serbian railway, railway Subotica-Szeged, and Nis-Dimitrovgrad.

A thousand kilometers of highways and fast roads is amazing data with which we enter 2022, changing not just Serbia's regional ranking but also its economic outlook. Is it possible to evaluate the advantages of contemporary road infrastructure right now?

The construction of highways and expressways contributes to better connections within the country, but it is also of great strategic and regional importance. It saves time, reduces transportation costs, improves accessibility, and creates better regional connectivity. All of this leads to increased budget income, which we then use for building schools, hospitals, health centers. The level of commercial activity on highways increases as they are constructed. Along with the completion of the corridors, new investors are coming, new factories are opening, raising the salaries and living standards of the citizens of Serbia.

We are entering the new year with the first fast trains, but also with the construction of the first line of the Belgrade metro. How much does the construction of the subway itself enhance the working temperature and investment attractiveness of Belgrade?

Building a subway in Belgrade is one of the largest and most important infrastructure projects we are currently implementing. The dream of building a subway in Belgrade has lasted for decades, and I am proud that we are finally fulfilling that dream today. The construction of the metro in Belgrade is part of the “Serbia 2025” project, which president Aleksandar Vucic has placed the highest priority on. This will make life easier for citizens, establish a healther mode of transportation, reduce traffic jams and impact on Serbia's GDP growth. While I was mayor, I used to say that Belgrade would be a "city of cranes and hoists." Finally, the metro will transform Belgrade into a global metropolis. This will result in new investments and jobs.


Serbia received $3.44 billion in foreign direct investment in 2020, accounting for nearly half of all foreign direct investment in Southeast Europe. Inflows from foreign direct investments totaled 2.72 billion dinars in the first seven months of this year, a 30 percent increase over the same period last year. What were the most popular investment industries, and where do the biggest investors come from?

If we look at the activities, the biggest net inflow of foreign direct investments in the first half of this year was realized in mining, due to the investments of the company Zijin Mining. Of course, there is also the processing industry as the sector that traditionally attracts the largest foreign direct investment, as well as the transportation, construction, and financial services sectors, which all recorded significant inflows. When we talk about the geographical origin of investors, the European Union is still the most important investor in Serbia with a share of 58 percent of total investments. But, when we speak of countries, China, the Netherlands, Germany, Switzerland, and Austria have the largest net inflow of foreign investments, accounting for slightly less than 70% of all matured investments.

What is especially attractive to foreign investors that approves their decision to invest in Serbia?

Serbia's image in the world has significantly improved in the last few years, and our country has become appreciated both in the East and in the West. Investors know that their investments and businesses are safe when they invest in Serbia. Serbia is also in an excellent geographical position and is the leader in this region of Europe, with good infrastructure, educated young people, and people who are willing to work. Investors also know that they can always count on the Government of Serbia as a partner, and that we are here to listen to them, talk to them, and address any problems that may arise.

Belgrade, as well as the entire country, has turned into a massive construction zone. How appealing is real estate investment for foreign companies?

Despite the numerous challenges caused by the pandemic, Serbia has remained a financially stable country, full of opportunities, and, as such, it is interesting to everyone, so business people from all over the world are present here today. We have a favorable investment and business climate, for which we are renowned amongst foreign investors. It is crucial that all potential investors, in every sector, including construction, are aware of this.

It's not surprising that investments in the construction and building sector in 2020 totaled over 400 million euros, nearly twice as much as the Southeast Europe/Balkans region's average for that year. It is an industry with a significant share in our GDP and has recently expanded, particularly in large cities such as Belgrade and Novi Sad.

One of the construction segments that is particularly appealing to investors, primarily foreign ones, is investing in the construction or adaptation of hotel and spa facilities. As a country rich in natural springs and thermal waters, with 28 spas and 19 climatic places, Serbia is an attractive destination for investors in spas, hotels, and even medical centers. Investors in this segment also have the support of the Serbian Government, which provides subsidies for the building and adaptation of spa and hotel facilities. Industrial facilities, logistics centers, and commercial facilities are also becoming increasingly prominent segments of construction investment.

Belgrade Waterfront is currently the region's largest building site and one of Serbia's major international investments, launching domestic construction and related industries. Can you provide other examples of good practice?

When it comes to the construction sector, Belgrade Waterfront is one of the examples of the successful realization of international investment in Serbia. We have a huge construction site, which is the largest project of its kind in Southeast Europe. I am very happy and proud of what we have accomplished since. Instead of the ugliest part of the city, we now have the most beautiful area of the capital, which Belgraders, as well as other citizens of Serbia, are proud of and are eager to show to visitors. Belgrade Waterfront shows that dreams come true and promises are being fulfilled. There are 14 buildings under construction in Belgrade Waterfront. So far, more than 3,500 apartments have been sold, because there are as many as 24 buildings on the market. We can confidently state that Belgrade Waterfront changed the perspective of the capital and Serbia and propelled the construction industry and economy. This project is currently the best example of good practice, but we are fully open to investors who are interested in similar projects and will also contribute to job creation.

What are the predictions for foreign investments in 2022? Which sectors are likely to attract the most foreign investment, and what are Serbia's most important needs for foreign investment?

Serbia's interest is to attract even more domestic and foreign investments, particularly long-term, export-oriented investments that add value, as well as new technical and technological solutions. I am confident that we will continue to achieve good results in 2022, possibly even exceeding the record set in 2019, when we received 3.815 billion euros in FDI. According to data from this year, FDI inflows reached 3.18 billion euros in the first ten days of November, while the NBS estimates that by the end of the year, the value of FDI will amount to about 3.4 billion euros. By the way, during the pandemic last year, the total share of investments in GDP was 24.2 percent, and in 2019 it was 25.1 percent, which are both satisfactory outcomes.

Our goal is to retain Serbia among the most appealing investment destinations, because investments mean new jobs. They have a positive impact on domestic partners who enter supply chains and improve their production and competitiveness. We strive to attract as many investment projects as possible, which will enable the creation of extra added value and projects that will bring sophisticated technologies to Serbia. In that sense, there is room for such investments from the food industry, through ICT technologies, to the automotive, electronic, mechanical, and related production sectors.

Also, there are more and more high-tech projects, especially regarding the automotive and related industries such as electronics, mechanical, metal, where world manufacturers and innovators are present in Serbia, such as the German Continental and many others. These are the companies that are opening research and development centers in Serbia and developing new products, creating innovations in our country. With that, the value of individual investment projects and projects that are no longer labor-intensive but capital-intensive is growing, and there will be more and more of that. That is why we need to keep investing in infrastructure, and that is why in 2022 we will continue with large capital projects. All this is part of the “Serbia 2025“ project, and the main goal is to raise the living standard of citizens.


Cover photo: JOLANDA KORAĆ

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