FDI in Central, East and Southeast Europe: FDI in Central, East and - - PowerPoint PPT Presentation

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FDI in Central, East and Southeast Europe: FDI in Central, East and - - PowerPoint PPT Presentation

Sep 23, 2022 123 likes •276 views

Wiener Institut fr The Vienna Institute for www.wiiw.ac.at Internationale International Economic Wirtschaftsvergleiche Studies wiiw FDI Report 2017 FDI in Central, East and Southeast Europe: FDI in Central, East and Southeast Europe:

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Wiener Institut für Internationale Wirtschaftsvergleiche The Vienna Institute for International Economic Studies

www.wiiw.ac.at

FDI in Central, East and Southeast Europe:

wiiw FDI Report 2017 Gábor Hunya

FDI in Central, East and Southeast Europe: Recovery amid Stabilising Economic Growth

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  • Global FDI declined but inflows in CESEE increased
  • Balance of payments statistics, directional principle against revised 2015 data; methodology

uneven

  • Economic growth stabilised or improved in CESEE and its main investors
  • As EU transfers were down, FDI became more prominent in financing investments in

2016

Main FDI trends in 2016 

  • FDI stock by investing countries: increasing role of the Netherlands (tax optimisation)
  • FDI stock by activites: manufacturing or finance (capital intensity)
  • Greenfield investments also down globally, but up in CESEE
  • Higher number of projects in manufacturing and services; higher amounts of capital in oil and

gas exploration and energy generation

  • Austria keeps rank 3 as investor in the region
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3 40000 45000 EU-CEE Western Balkans Turkey CIS-3 + Ukraine Russia

FDI inflows in 2016 up by 45% against 2015: EU-CEE +23%, Western Balkans -7%, Turkey -30%, CIS-3 and Ukraine +54%, Russia +219%

Increasing FDI inflows in CESEE, but high volatility by region 

5000 10000 15000 20000 25000 30000 35000 2010 2011 2012 2013 2014 2015 2016 EUR million EU-CEE: European Union - Central and Eastern Europa. CIS-3: Belarus, Kazakhstan, Moldova. Source: wiiw FDI Database.

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Increasing inflows in HR, CZ, HU, RO, AL, MK, KZ, RU, UA

12000 14000 16000 2014 2015 2016

RU 2014: 22,037, 2016: 34,012

FDI inflows, EUR million, 2014-2016

2000 4000 6000 8000 10000 BG HR CZ EE HU LV LT PL RO SK SI AL BA XK MK ME RS TR BY KZ MD RU UA EUR million LT 2014: -18; 2016: -188. SK 2014: - 386; 2015: -176; 2016: -267. Source: wiiw FDI Database.

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5 20 25 EU-CEE Western Balkans + Turkey CIS-4 + Ukraine

FDI inflow increased in comparison with total investment

FDI inflows in % of GFCF, 2008-2016

5 10 15 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: wiiw FDI Database and wiiw Annual Database.

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6 Transfers FDI net FDI liability

EU transfers declined, role of FDI increased in investment financing in 2016

  • 25
  • 15
  • 5

5 15 25 35 Hungary

Transfers on capital account, FDI net, and FDI liabilities in % of GFCF

10 15 20 Czech Republic

Source: wiiw Annual Database.

  • 65
  • 55
  • 45
  • 35
  • 25

2009 2010 2011 2012 2013 2014 2015 2016 5 10 15 2009 2010 2011 2012 2013 2014 2015 2016 Romania

  • 10
  • 5

5 10 2009 2010 2011 2012 2013 2014 2015 2016 5 10 15 20 2009 2010 2011 2012 2013 2014 2015 2016 Poland

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Greenfield FDI projects 2013-2016: number of projects, announced capital investment in EUR million and number of jobs to be created

More greenfield projectes and higher capital investment

1500 250000 300000 Number of projects (right scale) Investment Job creation

Source: http://www.fdimarkets.com. 500 1000 50000 100000 150000 200000 2013 2014 2015 2016

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8 20% 40% 60% 80% 100%

Share of main activities in the number of greenfield projects, in %, 2016

Differences in specialisation in manufacturing or services

Services Electricity Construction Logistics, Distribution & Transportation Sales, Marketing & Support Manufacturing

0% 20% 40% 60% 80% 100% BG HR CZ EE HU LV LT PL RO SK SI RS TR RU 0% BG HR CZ EE HU LV LT PL RO SK SI RS TR RU

Remark: Excluding mining and recycling. Source: http://www.fdimarkets.com.

Share of main activities in the capital investments of greenfield projects, in %, 2016

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Inward FDI stock in EU-CEE and Western Balkans by major home countries, in %, 2010 and 2015

Rank 1 for the Netherlands on account of tax optimisation; stable rank 3 for Austria with about 7.3% of the stocks

EU-CEE

11.2 6.1 13.3 9.2 1.6 4.5 5.8 Austria France Germany Luxembourg Netherlands

  • ther EU-15

11.1 7.2 13.4 8.0 3.8 3.9 7.3

15.7 2.3 6.2 1.7 8.7 19.3 18.2 0.8 6.9 20.1 Source: wiiw FDI Database.

Western Balkans

7.3 20.5 20.4

  • ther EU-15

EU-CEE United States Cyprus+Russia

  • ther countries

12.5 2.2 4.6 2.7 15.9 16.3 18.9 1.2 12.4 13.4 Austria Germany Greece Netherlands Russia

  • ther EU-15

EU-CEE United States Cyprus+Russia

  • ther countries

6.0 20.2 19.2

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Austrian greenfield projects in CESEE – modest recovery, but still only rank 8 or 9 in the region

100 120 140 Number of projects in CESEE Share in total number Investment in CESEE, EUR billion Share in total investment

Source: http://www.fdimarkets.com. 20 40 60 80 2010 2011 2012 2013 2014 2015 2016

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  • Stronger economic growth and more FDI expected, but not in all CESEE countries
  • FDI will increase in EU-CEE and the WB as local economies are recovering further

and European companies invest more

  • Also EU transfers will increase and support an investment recovery together with

FDI in EU-CEE

  • Outlook for 2017

  • First-quarter FDI inflows not particularly high – may not be of much relevance
  • More new greenfield projects, first of all in HU, PL, RO and RS
  • No risk reduction expected in MD, RU and UA, thus FDI will hardly increase
  • EU-CEE and parts of WB remain targets of production and services outsourcing

despite rising wages and occasional labour shortages – room for productivity improvement

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WIIW FDI REPORT 2017: FDI in Central, East and Southeast Europe: Recovery amid Stabilising Economic Growth 149 pages including 104 Tables and 9 Figures, analysis and

methodological explanations

hardcopy: EUR 70 (PDF: EUR 65)  Order via wiiw’s website www.wiiw.ac.at,

per e-mail koehrl@wiiw.ac.at Online access to the wiiw FDI Database via https://data.wiiw.ac.at Annual fee: EUR 160

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Country codes

AL Albania MK Macedonia BA Bosnia and Herzegovina PL Poland BG Bulgaria RO Romania CZ Czech Republic RS Serbia EE Estonia RU Russia HR Croatia SI Slovenia HU Hungary SK Slovakia

HU Hungary SK Slovakia KZ Kazakhstan TR Turkey LT Lithuania UA Ukraine LV Latvia XK Kosovo ME Montenegro CESEE Central, East and Southeast Europe CIS Commonwealth of Independent States EU-CEE European Union – Central and Eastern Europe WB Western Balkans