The causal relationship between current account and financial account balance in Western Balkan countries: The case of Serbia

Kovačević, Radovan

doi:10.5937/bankarstvo2004009k

Cited by 4 publications

(4 citation statements)

References 12 publications

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“…Given that the inflows of funds based on FDIs are not sufficient to fully finance the CAD, the remaining amounts of the deficit are financed by borrowing abroad (Kovačević, 2020). Observing the dynamics of external indebtedness of the RS (Figure 8) in the observed period, it can be established that there is an almost continuous trend of increasing external debt, so that the highest level of external debt was recorded in the last year of the analyzed interval (41.9 billion euros).…”

Section: External Debt As a Source Of Financig The Cadmentioning

confidence: 99%

Challenges of financing the current account deficit of the Republic of Serbia

Čakajac,

Janković,

Dimitrijević

2024

EurJ Appl Econ

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Developing countries, including the Republic of Serbia, due to the lack of capital and the disparity between domestic accumulation and investment spending find a solution for financing the current account deficit in the import of foreign capital, which results in financial balance surpluses. In conditions of insufficient inflow of foreign capital, an additional source of financing the balance of payments imbalance is borrowing abroad. The aim of the research is to identify the key sources of financing the current account deficit of the Republic of Serbia in the 2007-2022 period. The research results suggest that, although during the last few years the coverage of the current account deficit is largely provided by the net inflow of foreign direct investments, these funds are still not sufficient to ensure the financing of the deficit components of the current account of the Republic of Serbia. This is greatly contributed by the fact that one of the main deficit components is precisely the ever-increasing outflow of income that is realized on the basis of these investments. Due to all of the above, borrowing abroad is still used as an option for financing the deficit.

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Section: External Debt As a Source Of Financig The Cadmentioning

confidence: 99%

Challenges of financing the current account deficit of the Republic of Serbia

Čakajac,

Janković,

Dimitrijević

2024

EurJ Appl Econ

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“…Pored visine i konitinuiteta deficita tekućeg računa, negativan saldo ovog pokazatelja predstavlja makroekonosmki problem u privredama Zapadnog Balkana i sa aspekta njegove održivosti. Analogno tome, održivost deficita tekućeg računa predstavlja veoma bitan pokazatelj koji ukazuje na eksternu poziciju zemlje i mogućnost da servisira svoje obaveze (Kovačević, 2020). Anailza održivosti deficita tekućeg računa najčešće se sprovodi stavljanjem u odnos visine deficita i nivoa bruto domaćeg proizvoda.…”

Section: Analiza Tekućeg Računa Privreda Zapadnog Balkanaunclassified

The contribution of the tourism sector to the neutralization of the external imbalance in the Western Balkan countries

Čakajac

2023

Turističko poslovanje

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Apart from the contribution to economic growth and development of the national economy, the tourism sector can represent an important factor in reducing the balance of payments imbalance. Thanks to the higher export compared to the import of tourist services, conditions are created for realizing a surplus in the exchange of tourist services, which can be a significant source of financing the current account deficit. This can be particularly important for the countries of the Western Balkans, since they are characterized by a balance of payments imbalance, but at the same time they have significant tourism potential that can be further valorized in order to reduce the current account deficit and mitigate the problem of external imbalance. Bearing the above in mind, the paper tries to quantify the contribution of the tourism sector in financing the current account deficit of the countries of the Western Balkans in the 2007-2022 period. The results of the research suggest that the importance of the tourism sector, as a factor in financing the balance of payments imbalance, varies significantly among the analyzed economies, with a positive contribution of the tourism sector in neutralizing the current account deficit recorded in all observed countries. Apart from the above, the research tries to show that there is a significant possibilities not only for the development of tourism potential in the countries of the Western Balkans, but also for its significant contribution in reducing the balance of payments imbalance as one of the key development limitations of the observed economies.

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“…By observing the remaining two components of the balance of payments, it can be pointed out that the primary income account harms the balance of payments, while the secondary income account shows positive effects. When it comes to the primary income account, continuous deficits have been reported, due to the outflow of income stemming from direct, portfolio, and other investments (Kovačević, 2020). On the other hand, the balance of secondary income represents the most significant component of financing the current account deficit.…”

Section: Figurementioning

confidence: 99%

The Role of Remittances in Financing the Current Account Deficit: The Case of Serbia

Čakajac,

Janković,

Luković

2023

Naše Gospodarstvo/Our Economy

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Migrations of the resident population in Serbia, with the Western European countries as the main destination, have influenced remittances becoming an important source of income from abroad. Relevant economic literature, as well as the influential views expressed in the international financial institutions’ reports, indicate that remittances are a more stable type of inflow of funds from abroad to developing countries compared to other types of capital movements. In addition to the positive economic effects of remittances, they also play a significant role in the balance of payments deficit reduction. The subject of this research refers to the examination of the role of remittances in financing the current account deficit in Serbia. The research goal is to explore whether the importance of remittances as a factor in the balance of payments deficit reduction in Serbia increased in the period 2007-2021. The results of the research show that remittances have become an important factor in current account deficit reduction in Serbia during the observed period.

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The causal relationship between current account and financial account balance in Western Balkan countries: The case of Serbia

Cited by 4 publications

References 12 publications

Challenges of financing the current account deficit of the Republic of Serbia

Challenges of financing the current account deficit of the Republic of Serbia

The contribution of the tourism sector to the neutralization of the external imbalance in the Western Balkan countries

The Role of Remittances in Financing the Current Account Deficit: The Case of Serbia

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