Foreign investments at EUR 200mn in 2012

BELGRADE -- The net influx of direct foreign investments in Serbia is expected to be at EUR 200 million in 2012 and EUR 1.2 billion in 2013.

Jorgovanka Tabaković (Beta)
Jorgovanka Tabaković (Beta)

This has been announced by National Bank of Serbia (NBS) Governor Jorgovanka Tabaković

Presenting the monthly inflation report, she stated that the direct foreign investments were not at the expected level in 2012 because there had been both capital influx and debt payments.

The net effect was EUR 400 million of influx together at the end of September, and the balance now is already negative because of debt payments, she noted.

Head of the NBS sector for monetary analysis and statistics Branko Hinić said the NBS expected the economic activity in Serbia to go down by 2 percent in 2012 and grow by 2.5 in 2013.

The drop in economic activity in 2012 was caused by lower domestic private demand, both consumerist and investment, while positive effects come from government spending, mostly in the first half of the year, he said.

Hinic stressed that export branches will help significantly in economic growth next year, most of all the automotive industry.

"Banks not withdrawing capital"

Jorgovanka Tabaković also stated that there are no indications of negative trends or capital flight in Serbia's banking sector.

"There are no indications of negative trends in terms of leaving the system either," the governor said.

Banks in Serbia are repaying debts to their parent banks, but the NBS monitors all such movements and knows on what basis the money enters the banking system and leaves it, Tabaković said.

"I see no evil intention in newspaper articles that unfoundedly report about withdrawing the banks' capital from the country, since they are the result of NBS' insufficient activity in explaining to the public what is repayment of debts and what withdrawing the capital," Tabaković stressed.

As she put it, the banks from this market are not pulling out of the country, apart from Hypo Group, which is pulling out from this part of Europe, not only from Serbia.

Serbia's banking sector still has profit, but traditionally regular repayment of loans by the citizens is turning into a problem, since there is no job security, she noted.

The banks in Serbia have high liquidity, but there are no those seeking loans, Tabaković said, adding that one of the main reasons for concern is that there is no production intended for export, which would generate the much needed revenue in foreign currencies.

The NBS governor said that deposits in banks are at record high level, exceeding EUR 8 billion, and added that increase in savings in November this year is almost the same as in 2011.

When it comes to the share of problem loans, Tabaković pointed out that they are at a stable level of 18 to 19.9 percent in the past three years, which is much more than in the surrounding countries, but not because Serbia has more problem loans, but rather because the assessment of risk assets is more conservative here.

Tabaković also announced a conference - the Belgrade Initiative - that will bring together the signatories to the Vienna Convention and a wider range of participants, at which an agreement on what can be done in terms of problem loans will be made.