Bloomberg News

Serbian Current-Account Gap Widens on Telekom Equity Buyback

March 27, 2012

Serbia’s current-account deficit widened in January after the country’s state-controlled phone company bought back a 20 percent stake sold by Greece’s Hellenic Telecommunications Organization SA. (HTO)

The shortfall totaled 268.6 million euros ($358.25 million) expanding 20.8 percent on the year, the Belgrade-based Narodna Banka Srbije said on its website today. A 10.8 percent trade deficit increase also fueled the gap.

Foreign direct investment outflows stood at 430 million euros in the month when Telekom Srbija, the dominant fixed-line and mobile service operator, bought back the stake from Greece’s OTE for 380 million euros and paid an additional 17 million euros in dividends to its former partner.

Net portfolio investments rose to 41.5 million euros from 35.2 million euros in the same month last year, with investment in the government debt more than doubling to 48.5 million euros from 19.9 million euros last year.

Foreign direct and portfolio investments are critical for Serbia to help it finance the budget deficit through domestic market borrowing and stabilize the weakening dinar ahead of May 6 parliamentary elections.

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


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