Substantial growth of FDI in Western Balkans

The Western Balkan region recorded a substantial growth in foreign direct investments last year, despite a negative global trend, as shown by the World Investment Report 2019, compiled by the United Nations Conference on Trade and Development (UNCTD).

While the FDI influx dropped by 13% to USD 1.3 trillion globally, the Western Balkans, designated as Southeast Europe in the report and categorized as part of a wider region of transition economies, recorded a 33% growth, amounting to EUR 7.4 billion.

According to the report, the largest growth in FDI in the Western Balkans was recorded by North Macedonia which stood at 260%. The value of FDI in this country grew from USD 205 million in 2017 to USD 737 million in 2018.

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Serbia was the second largest FDI recipient among transition economies as the FDI influx grew by 44% to USD 4.1 billion, driven by a surge in new equity capital.

Montenegro was the only country in the region to record a decline in FDI, by 12% to USD 490 million, whereas Bosnia and Herzegovina recorded a growth of 4%, amounting to USD 468 million. FDI in Albania increased by 13% to USD 1.3 billion.

Of the EU member states in the region, Slovenia had the biggest FDI growth – by 81% (worth USD 1.4 billion). FDI in Croatia dropped by 43% to USD 1.2 billion, whereas Bulgaria also recorded a decline, by 21%, with the FDI amounting to USD 2 billion. Greece recorded growth by 9% to USD 4.3 billion, whereas FDI in Romania grew by 9% to USD 5.9 billion.

Serbia’s economy is the largest in the sub-region and is relatively diversified, the report says.

The country’s strategic location facilitates logistics investment, such as the Vinci Airports (France) stake in Nikola Tesla Airport in Belgrade. Its natural resources (especially copper) are also attracting resource-seeking firms. The Zijin Mining Group (China), for example, acquired RTB Bor’s copper production.

FDI in Serbia’s growing automotive cluster (e.g. the projects of the United Kingdom-based wire producer Essex Europe and Japan-based cable producer Yazaki) benefits from the country’s skilled workforce. Finally, the country’s knowledge base is attracting R&D centres, such as German tire maker Continental’s development centre in Novi Sad, the UNCTD says in the report. 

(Radio Free Europe, 13.06.2019)

This post is also available in: Italiano

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