INTERVIEW: “The weekend’s protests were the Russian people's, not the opposition’s” – Maxim Reznik
Western Balkans citizens legally resident in EU equal to 14% of region’s population
International Ice Hockey Federation (IIHF) has stripped Belarus of the right to hold the World Championship this year
Alexei Navalny arrested on arrival as he returns home
Russian industry falls by 2.9% y/y in 2020.
ING: Russian corporates are back to foreign debt redemption in 2020
Russia's NorNickel adopts blockchain for supply chain management
Ukraine’s industrial output jumped 4.8% y/y in December
State-owned Ukrgasbank signs off on convertible €30mn IFC loan ahead of its privatisation
National Bank of Ukraine retains a key policy rate at 6%, the outlook of the CPI deteriorates
Estonia's two big parties agree on grand coalition
VISEGRAD BLOG: Central Europe's populists need a new strategy for Biden
LONG READ: The oligarch problem
OUTLOOK 2021 Lithuania
Czech billionaire Kellner´s PPF makes another bid for Moneta Money Bank
Czech MPs pass protectionist food law in violation of EU rules
M&A in Central and Eastern Europe fell 16% in value in 2020, says CMS report
Hungarian vehicle makers hit by supply chain shortage
COVID-19 and Trump’s indifference helped human rights abusers in 2020
Polish industrial production continues boom in December
OUTLOOK 2021 Poland
OUTLOOK 2021 Slovakia
BRICKS & MORTAR: Rosier future beckons for CEE retailers after year of change and disruption
FDI inflows to CEE down 58% in 1H20 but rebound expected
BALKAN BLOG: Only better waste management can clean rivers of trash
Pandemic pushes public debt close to 80% of GDP in Albania and Montenegro
BALKAN BLOG: Superstition and resentment surround vaccination plans
Albania needs reforms for e-commerce to thrive, says World Bank
Bosnia's exports in 2020 amounted to BAM10.5bn, trade deficit to BAM6.3bn
Bulgaria’s latest nuclear u-turn
Retailers and restaurant owners threaten protests in Bulgaria if reopening is delayed
Bulgaria's Biodit first company to IPO on new BEAM market
Spring lockdown caused spike in online transactions in Croatia
ING: Growth in the Balkans: from zero to hero again?
Labour demand down 28% y/y in Croatia in 2020
Kosovo’s biggest opposition party risks being unable to run in general election
OUTLOOK 2021 Moldova
Storming parliaments: New Europe's greatest hits
World Bank revises projection for Moldova’s 2020 GDP decline to 7.2%
Montenegro’s special prosecution probes finance minister over €750mn Eurobond issue
North Macedonia plans to cut personal income tax in IT sector to zero in 2023
Romania government to pursue “ambitious” timetable for justice reforms
Private finance mobilised by development banks up 9% to $175bn in 2019
OUTLOOK 2021 Romania
Slovenian crypto payment system enters Thai market
Slovenia’s economic sentiment indicator up 2.2 pp m/m in January
Slovenia lost €10bn by neglecting wood industry for decades
OUTLOOK 2021 Slovenia
D’S Damat franchise deals ‘show Turkey’s hard-pressed mall operators becoming their own tenants’
Turkey’s benchmark rate held as concerns over faltering recovery come to fore
Turkish lira breaches HSBC’s stop-loss, Turkey ETF signalling outflows
CAUCASUS BLOG : What can Biden offer the Caucasus and Stans, all but forgotten about by Trump?
Armenia ‘to extend life of its 1970s Metsamor nuclear power plant after 2026’
OUTLOOK 2021 Armenia
OUTLOOK 2021 Azerbaijan
OUTLOOK 2021 Georgia
Iran’s President Khamenei menaces private citizen Trump
Iran’s technology minister indicted for failing to properly implement internet censorship
No US move to rejoin Iran nuclear deal imminent, say Biden national security nominees
TEHRAN BLOG: Will Biden bet on a quick return to the Iran nuclear deal?
Central Asia vaccination plans underwhelm, but governments look unruffled
Fears of authoritarianism as Kyrgyz populist wins landslide and backing for ‘Khanstitution’
COMMENT: Mongolia is an island of democracy
OUTLOOK 2021 Mongolia
Mongolia's PM quits amid protests over treatment of mother with coronavirus and newborn baby
Mongolia's winter dzud set to be one of most extreme on record says Red Cross
Tajikistan: Writing for the president is on the wall (and then scrubbed off)
OUTLOOK 2021 Turkmenistan
Turkmenistan: How the Grinch stole New Year
COMMENT: Uzbekistan is being transformed, but where are the democratic reforms?
Download the pdf version
More...
Foreign direct investment (FDI) inflows to countries in Central, Eastern and Southeast Europe fell by 58% year-on-year in the first half of 2020, as the coronavirus (COVID-19) pandemic and lockdown curbed economic activity, according to a report from the Vienna Institute for International Economic Studies (wiiw) released in December.
The decline was steeper than the 49% global fall, though less severe than the 75% decline in FDI in developed economies, the annual wiiw FDI Report showed. However, there were substantial variations in how severely the impact of the pandemic was on FDI across the CEE region and the negative FDI inflows to Russia dragged down the result for the region. In the eastern EU members, FDI fell by just 35% and the fall was as small as 8% in the Western Balkans. Meanwhile, a decline of around 40% was recorded in both the Commonwealth of Independent States (CIS) — excluding Russia — as well as in Ukraine and Turkey.
wiiw economists forecast that FDI inflows should return to pre-COVID levels in about two years. Both CEE’s EU members and parts of the Western Balkans could benefit from near-shoring of production by major Western multinationals, as they re-think their supply chains.
“Over the long run technological change — especially in the automotive industry — will change the structure of value chains and may see Western investors return investments from Eastern Europe to their home markets,” says the report.
They warn, however, that “the takeover of domestic-oriented sectors by national capital and economic nationalism may reduce foreign investment in Eastern Europe”.
By segment, wiiw reports that the capital pledged in greenfield investment projects across the region fell by 23%, less than the global decline. “Low commitments in greenfield investments continued also in the third quarter and amounted to 41% lower in the first three quarters of 2020 than in the previous year,” said the report. “However, the bulk of the decline in capital commitments in [Central, Southeast and Eastern Europe] CESEE can be attributed to Russia and Kazakhstan as a response to low international oil prices.”
Within the region, the eastern EU members did particularly well, seeing a fall in the number of greenfield investment projects of only 21%, while the investment value dropped by 16% in the first three quarters of 2020. Despite the adverse circumstances, four countries — Czechia, Latvia, Poland and Slovenia — “all received higher amounts of investment commitment than a year earlier, indicating the steady commitment of investors, especially in the real estate sector”, the report said.
Manufacturing was more vulnerable to the recession than other sectors, but investment continued in the automotive industry — an important component of the Central European economies — which is “under pressure to reduce the burden on the climate and to introduce profound technological changes, even while suffering a drop in demand during the COVID-19 crisis”, said wiiw. “The main current challenges to the automotive industry include the rise of electric cars, CO2 fleet emission targets, autonomous and connected driving.”
The industry accounted for as much as 38% of manufacturing production in Slovakia, 28% in the Czech Republic, 26% in Hungary and 23% in Romania.
Register here to continue reading this article and 5 more for free or purchase 12 months full website access including the bne Magazine for just $250/year.
Register to read the bne monthly magazine for free:
Already registered
Password could contain only a-z0-9\+*?[^]$(){}=!<>|:-_ characters and have 8-20 symbols length.
Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.
Forgotten password?
Email field can't be empty.
No user with this email address.
Access recovery request has expired, or you are using the wrong recovery token. Please, try again.
Access recover request has expired. Please, try again.
To continue viewing our content you need to complete the registration process.
Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.
If you have any questions please contact us at sales@intellinews.com
Sorry, but you have used all your free articles fro this month for bne IntelliNews. Subscribe to continue reading for only $119 per year.
Your subscription includes:
For the meantime we are also offering a free subscription to bne's digital weekly newspaper to subscribers to the online package.
Click here for more subscription options, including to the print version of our flagship monthly magazine:
More subscription options
Take a trial to our premium daily news service aimed at professional investors that covers the 30 countries of emerging Europe:
Get IntelliNews PRO
For any other enquiries about our products or corporate discounts please contact us at sales@intellinews.com
If you no longer wish to receive our emails, unsubscribe here.
Magazine annual electronic subscription
Magazine annual print subscription
Website & Archive annual subscription
Combined package: web access & magazine print annual subscription