Analysis of the international investment position of the Republic of Serbia in the context of external sustainability

Abstract

This paper analyses the dynamics and structure of Serbia’s international investment position. Given that the country’s net debtor position deteriorated during the observed period, the main objective of the research is to identify which forms of financial assets and liabilities played a decisive role in its formation. Particular attention is devoted to the structure of liabilities to non-residents, since the largest part of total liabilities still arises from foreign direct investment, primarily in the form of equity capital and reinvested earnings. At the same time, the results indicate an increase in debt-creating liabilities, particularly through government borrowing based on the issuance of debt securities and financial loans. In this context, the paper emphasizes the importance of directing debt-based sources of financing toward productive investments that can increase future foreign exchange inflows and strengthen the country’s capacity to service its external obligations.