ECONOMY

FDI in Serbia tops $1.8 bln in Jan-May

BELGRADE (Reuters) – Net foreign investment in Serbia exceeded $1.8 billion from January to May 2007 and a state agency said hopes were now high that this year’s inflows will be close to the $4 billion secured in 2006. A January-May balance of payments report published by the central bank showed net foreign direct investments at $1.3 billion, up from $499 million in the same period last year. It also showed additional portfolio investment – measured for the first time this year – at $561 million. «These numbers are very encouraging,» Aleksandar Miloradovic of Serbia’s Investment and Export Promotion Agency (SIEPA) told Reuters. «We hope total foreign investments will exceed $3 billion and probably be close to last year’s $4 billion.» The 2007 figure will include revenue from the sale of a third GSM license and from a concession deal granted to a consortium led by Spanish FCC to build a highway running across Serbia. Central bank statistics show most investment this year going into the food-processing, retail trade, hotel and restaurant, financial services and real estate sectors, with investors from Austria, Luxembourg, Greece and Italy topping the list. «We have seen some Italian investment in the labor-intensive textile industry. They invest in small production and design lines in response to Chinese copycats,» Miloradovic said. Serbia would like to woo capital into high technology but investment in the IT sector remains modest. Investment in the energy sector – traditional thermal and hydroenergy and alternative biofuels and wind energy – has also been slow due to some legal and parliamentary hurdles.