unctad.org | FDI INCREASING TO MANY EASTERN EUROPEAN COUNTRIES
PRESS RELEASE
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FDI INCREASING TO MANY EASTERN EUROPEAN COUNTRIES

TAD/INF/B32/E
27 March 2003

In line with a general upward trend in FDI to Central and Eastern Europe, inward FDI to the Russian Federation held steady between 1998 and 2001, at an annual average of $2.8 billion. Given the size of the economy, and compared with the volume of flows to other countries in the region, however, this level is relatively low, suggesting that FDI is still at an early stage. On the other hand, the Russian Federation is by far the leading investor country in the region, accounting for more than 75% of its annual outflows. The US is the main investment partner, holding over 20% of FDI stock in 2002, but Cyprus had almost the same percentage share last year.

The largest recipient of FDI flows in the region is Poland, which garners about $9.3 billion in 2000, or a third of the region´s total. The country´s inflows have increased continuously since 1991 by a remarkable 44% per year on average, with the fastest growth registered in telecommunications. The largest TNC affiliate is the Italian-owned Fiat Auto Poland SA.

In Romania, following years of stagnation at very low levels, FDI flows soared in 1997 and have remained at similar heights since, reaching $1.1 billion in 2002. Also in 1997, flows began to rise significantly to neighbouring Bulgaria, which reported an annual average growth rate of 45% between 1996 and 2001. Inflows to Bulgaria peaked at $1 billion in 2000; the surge is largely due to flows from developed countries.

Croatia as well enjoyed a substantial rise in FDI flows in the late 1990s - about 30% a year, on average - reaching the $1.5 billion mark in 2001. The importance of foreign investment in the national economy is reflected in the increasing ratio of FDI inflows to fixed capital formation. That ratio climbed from less than 5% in the early 1990s to more than 33% in 1999-2001, one of the highest such ratios in the Central and Eastern European region. Almost half of the country´s inward FDI stock is in finance and transport and communications, although at 18%, the chemical industry´s share is also high.

National investment profiles are being published online as they become available, based on each country´s reporting schedules. The profiles, which are part of UNCTAD´s World Investment Directory, provide quick electronic access to the latest statistics on foreign direct investment (FDI) and the operations of transnational corporations (TNCs). They include statistical definitions and sources, a listing of relevant national laws and regulations, information on bilateral and multilateral agreements and a bibliography.




For more information, please visit the Division on Investment, Technology and Enterprise Development website (www.unctad.org/dite).

Or contact:
Officer-in-Charge, Mr. Masataka Fujita, Investment Trends Section, T: +41 22 907 6217, F: +41 22 907 0194, E: masataka.fujita@unctad.org,
or
Ms. Katja Weigl, T: +41 22 907 5846, E: katja.weigl@unctad.org
or
UNCTAD Press Office, T: +41 22 907 5828, E: press@unctad.org.




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