Pandemic Halves Foreign Investments – Only a Slight Drop in the Western Balkans

The inflow of direct foreign investments in the 23 economies of Central, Eastern and Southeastern Europe was more than halved in the first half of the year, but the countries of the Western Balkans experienced a considerably smaller drop, as shown by the latest analysis by the Vienna Institute for International Economic Studies (WIIW).

In the countries of Central, Eastern and Southeastern Europe (CESEE), in the first six months of 2020, direct foreign investments dropped by 58% compared to the same period in 2019, whereas, on a global level, a smaller drop was recorded, by 49%, according to the estimate of the UNCTAD.

Still, the drop in the CESEE region was smaller than in developed economies, where it is estimated at 75%.

The drop of the inflow of direct of foreign investments did not affect the CESEE countries equally. In the Western Balkans, the drop was 8%, in the EU-CEE countries, it was 35%, and in the Commonwealth of Independent States plus Ukraine and Turkey group, it was around 40%.

In the observed six-month period, Russia had a negative inflow of direct foreign investments, WIIW says.

It is also noted that, in the CEE states that are members of the EU, the drop of foreign direct investments began back in 2019, when a three-year growth period ended.

In the entire CESEE region, the capital for greenfield investments lowered by 23%, whereas, on a global level, in the first half of 2020, the drop was 34%.