Net foreign direct investment (FDI) in Serbia fell 53% year-on-year in January-November 2025 to €1.94bn, central bank data showed on January 16.

The sharp decline in net FDI marks a significant slowdown from 2024, when Serbia attracted a record €5.1bn in FDI and posted one of the highest economic growth rates in Europe at 3.9%. The slowdown reflects a combination of domestic instability and weakening external demand.

FDI inflows in November amounted to €153.5mn, down from €478.4mn a year earlier, according to the National Bank of Serbia (NBS). On a cumulative basis, gross FDI reached €3bn over the first eleven months, with net inflows adjusted for Serbian residents’ investments abroad totalling €1.94bn.

Preliminary data indicated that manufacturing remained the largest recipient of foreign investment in the first nine months of 2025, accounting for 24.5% of total FDI, followed by construction at 17.5%, professional, scientific, technical and innovative activities at 17%, and wholesale and retail trade at 14.9%.

Investors were predominantly from the European Union, contributing 67.6% of inflows, while Asian countries accounted for 8.4%, the NBS said.

In addition to equity investments, Serbia recorded a net inflow of €1.6bn through financial loans during the period, reflecting increased borrowing by companies (€1.5bn) and banks (€327mn), while the government reduced its debt by €367mn.

Investor sentiment has been dampened by political uncertainty following the deadly collapse at Novi Sad’s main train station in November 2024, as well as geopolitical risks including US sanctions on oil company NIS and potential EU steel import restrictions, which could hit industrial output and exports.