Serbia Current-Account Gap Widens as Capital Outflows Continue

Serbia’s current-account deficit widened in the first five months as the imbalance in goods and services trade expanded and remittances from abroad contracted.

The shortfall in the current account, a measure of money flowing in and out of a country, grew 32.5 percent and reached 1.6 billion euros ($2 billion), Belgrade-based Narodna Banka Srbije said on its website today. Remittances, an important source of deficit financing, shrank 12.2 percent to 771.2 million euros.

Serbia’s monthly current-account gap in May equaled 9.1 percent of gross domestic product, according to the central bank. Serbia has pledged to keep its current-account deficit at about 8 percent of GDP in 2012. The first-quarter gap came to 16.8 percent of GDP.

Banks transferred 179 million euros in cash and deposits abroad in May, pushing the five-month total to 555.6 million euros.

The central bank’s balance of payments report also showed negative direct investment for a fifth consecutive month, with a cumulative outflow of 189.3 million euros. A total of 142.3 million euros was invested in the period, down from 700.2 million euros a year earlier.

To contact the reporter on this story: Gordana Filipovic in Belgrade at gfilipovic@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net