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September 28, 2021

FDI in Central and East Europe to halve in 2009

The volume of investments will drop to EUR 20 bln in the ten new member countries of the European Union, from EUR 44.86 bln in 2008, the Institute which noticed falls of up to 80 per cent in the first quarter stresses, according to The Money Channel. The foreign direct investments have already been curtailed by 9 per cent in 2008, after they had steadily grown in the previous years.

The fall affected especially countries like Poland, Bulgaria or the Baltic countries, while Romania and Slovenia registered growths also last year. In 2009, the foreign investments should focus on smaller projects, especially in services and the renewable energy sector, to the detriment of the major industrial projects and of the banking sector.

The direct investments registered record yields in 2008, reaching an average of 18 per cent in Hungary, 14 per cent in the Czech Republic and 12 per cent in Estonia, according to the expert Gabor Hunya, from the Institute.

Around 70 per cent of the revenues were repatriated by the investors, which deepened the current account deficits from the respective countries. In Hungary, a country particularly affected by the crisis, the phenomenon was so strong that the new foreign direct investments covered last year only half of the repatriated revenues, according to the Institute.

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