Foreign Direct Investment in Central, East and Southeast Europe: Recovery in the NMS, decline in the CIS
11 June 2015 10:00 am
wiiw presents its new analysis of FDI developments
wiiw, Rahlgasse 3, 1060 Vienna, lecture hall (entrance from the ground floor)
In 2014, FDI inflows recovered in the new EU Member States (NMS), they stagnated in the Southeast European countries and plummeted in the CIS, first of all in Russia and Ukraine. These trends are expected to continue in 2015.
Greenfield investments have declined in all three regions, but capital increases in foreign subsidiaries gathered momentum in the NMS. Even in this region, FDI inflow is still meagre in relation to gross fixed capital formation thus FDI is not a major driver of economic recovery.
Capital flight has hit Russia. Net FDI in the country has become negative as inflows declined by two thirds while outflows diminished only by one third. Chinese FDI contributes only a minor fraction to the FDI stock in the CESEE, but it is on the rise. More and larger greenfield projects originating in China and Hong Kong have been announced recently, first of all in Russia.