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Faculty of Economic, University of Kragujevac , Kragujevac , Serbia
Faculty of Management, University Metropolitan in Belgrade , Belgrade , Serbia
Department of Informatics in Kragujevac, Academy of Vocational Studies Šumadija , Kragujevac , Serbia
Educons University , Kamenitz , Serbia
The authors investigate the external solvency of three Balkan countries, two of which are socalled late transition countries (Bosnia and Herzegovina and Serbia), while Bulgaria is a country that has completed the transition and become a member of the European Union since 2007. Two indicators of external solvency are analysed: External debt/gross national income (GNI) and External debt/export of goods and services in the period 1997-2021. Moderate external indebtedness of these countries at the end of 2021 was established. Specifically, the external debt/GNI ratio for Bosnia and Herzegovina was 58.08%, for Serbia, 67.83%, and for Bulgaria, 57.52%. At the end of 2021, the second indicator of external solvency was within the permissible limits, i.e., it was well below 220%, which the World Bank marked as the upper limit of indebtedness. The value of this parameter was quite high for BiH (131%) and Serbia (122%), while for Bulgaria was incomparably lower (87%). An important factor of a country's external solvency is the Net inflow of foreign direct investments (FDI). The available data indicate that since 2010, Serbia has been much more successful in attracting FDI compared to the other two Balkan countries. Also, research on the correlation between GDP growth rate and FDI (as a share of GDP) for Serbia shows a statistically more significant positive relationship compared to Bosnia and Herzegovina and Bulgaria.
external debt, external solvency, export of goods and services, foreign direct investments
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