Monthly Report No. 11/2024 - FDI in Central, East and Southeast Europe

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Marcus How and Olga Pindyuk

wiiw Monthly Report No. 11, November 2024
34 pages including 6 Tables and 21 Figures

Current issues accessible exclusively for Members. Free access after an embargo period of six months.

FDI in Central, East and Southeast Europe

  • Geo-economic uncertainty taking its toll
    by Olga Pindyuk
    Long-term FDI developments in CESEE point to a structural shift in many countries, especially in Central Europe. Recently, investor confidence in the region has been badly affected by rising uncertainty. Data on greenfield investment projects announced reveal a significant weakening of investment performance in most countries of the region. China has been cementing its role as the biggest investor in the region.
     
  • Navigating political risks: The resilience of FDI in Hungary’s evolving economy  
    by Marcus How
    Hungary has experienced institutional decline under Prime Minister Viktor Orbán’s administrations, while nationalisation and ‘indigenisation’ have reduced FDI in sectors such as banking, utilities and energy. However, FDI in manufacturing and construction has remained stable – or has even grown – due to discretionary policy incentives. Despite the overall political risks, Hungary’s FDI inward stock exceeded EUR 100bn by 2023, with robust macroeconomic fundamentals, a low rate of corporate tax and the country’s EU membership serving to attract investors.
     
  • Forecasts of main economic indicators for Central, East and Southeast Europe for 2024-2026

 

Reference to wiiw databases: wiiw FDI Database

Keywords: foreign direct investment, greenfield projects, political risks, foreign direct investment, nationalisation, indigenisation

Countries covered: Austria, CESEE, China, Germany, Hungary, US

Research Areas: International Trade, Competitiveness and FDI

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