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Monthly Report No. 5/2023 - FDI in Central, East and Southeast Europe

Author

Listed:
  • Alexandra Bykova

    (The Vienna Institute for International Economic Studies, wiiw)

  • Branimir Jovanović

    (The Vienna Institute for International Economic Studies, wiiw)

  • Olga Pindyuk

    (The Vienna Institute for International Economic Studies, wiiw)

  • Nina Vujanović

Abstract

​This issue of the wiiw Monthly Report replaces our earlier series of the wiiw FDI Report. FDI in Central, East and Southeast Europe Data availability and preliminary results for 2022 by Alexandra Bykova FDI inflows into CESEE countries, excluding Russia, grew by 10.8% last year. Performance was highly uneven across the countries of the region. Russia’s isolation due to its war in Ukraine led to large-scale disinvestment of EUR 40bn, according to preliminary estimates. Preliminary FDI data for 2022 are available from the wiiw FDI Database as a first FDI data release this year. Data revisions and FDI data by partner and by economic activity will be released later, in autumn. FDI has been holding up, but the outlook is getting cloudier by Olga Pindyuk In contrast to the global trends, FDI inflows in CESEE increased in 2022, apart from in Russia and Ukraine. However, recent trends in greenfield investment and mergers and acquisitions signal a worsening of investment prospects. Southeast Europe is emerging as the most dynamic sub-region in terms of FDI attraction. Spurred by digitalisation and green transition developments, investors in the region have become increasingly interested in the renewable energy and electronic components sectors. What lies behind the strong FDI inflows in the Western Balkans? by Branimir Jovanović The six Western Balkan economies stood out as top performers in terms of FDI inflows within the Central, East and Southeast Europe region in 2022. However, a closer examination reveals a more nuanced picture regarding the composition and characteristics of investments, prompting questions about the overall advantages and long-term sustainability of the inflows. Although the region is projected to continue to attract substantial FDI in the near future, it is likely that the pace will decelerate from the remarkable performance witnessed in 2022. Deriving the underlying FDI trend in CESEE by Nina Vujanović FDI has been pivotal for the growth of CESEE economies. However, the patterns of FDI flows have been highly volatile. To allow policy makers to draw sound conclusions, we derive the underlying FDI trend for the CESEE region. The results show that, although the trend has consistently been upward since 1997, shocks caused by the global financial crisis, COVID-19 and the war in Ukraine have had a strong impact. Forecasts of main economic indicators for Central, East and Southeast Europe for 2023-2025

Suggested Citation

  • Alexandra Bykova & Branimir Jovanović & Olga Pindyuk & Nina Vujanović, 2023. "Monthly Report No. 5/2023 - FDI in Central, East and Southeast Europe," wiiw Monthly Reports 2023-05, The Vienna Institute for International Economic Studies, wiiw.
    • Handle: RePEc:wii:mpaper:mr:2023-05
    as

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    References listed on IDEAS

    as
    1. Gorodnichenko, Yuriy & Svejnar, Jan & Terrell, Katherine, 2014. "When does FDI have positive spillovers? Evidence from 17 transition market economies," Journal of Comparative Economics, Elsevier, vol. 42(4), pages 954-969.
    2. Vujanović, Nina & Radošević, Slavo & Stojčić, Nebojša & Hisarciklilar, Mehtap & Hashi, Iraj, 2022. "FDI spillover effects on innovation activities of knowledge using and knowledge creating firms: Evidence from an emerging economy," Technovation, Elsevier, vol. 118(C).
    3. Nina Vujanovic & Bruno Casella & Richard Bolwijn, . "Forecasting global FDI: a panel data approach," UNCTAD Transnational Corporations Journal, United Nations Conference on Trade and Development.
    4. Vujanović, Nina & Stojčić, Nebojša & Hashi, Iraj, 2021. "FDI spillovers and firm productivity during crisis: Empirical evidence from transition economies," Economic Systems, Elsevier, vol. 45(2).
    5. Amat Adarov & Gabor Hunya, 2020. "Foreign Investments Hit by COVID-19 Pandemic. FDI in Central, East and Southeast Europe," wiiw FDI Reports 2020-12, The Vienna Institute for International Economic Studies, wiiw.
    Full references (including those not matched with items on IDEAS)

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    Keywords

    FDI inflows; FDI outflows; FDI stocks; FDI by instrument of financing; greenfield investment; M&As; FDI by components; FDI by partner; FDI by sector; underlying FDI trend; intra-company loans;
    All these keywords.

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