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Bulgaria Gets Deplorable Amount of FDI in H1 2011
Date: 15/08/2011
Bulgaria Gets Deplorable Amount of FDI in H1 2011

Bulgaria attracted a total of only EUR 7.9 M in foreign direct investment in the first six months of 2011, according to latest data from the Bulgarian National Bank.

Compared with the first six months of 2010 when the foreign investments in Bulgaria reached EUR 532.7 M, Bulgaria's H1 2011 FDI declined 67 times.

The newly announced H1 2011 FDI result, however, is still an improvement after all throughout the first five months of the year Bulgaria kept registering a negative inflow of foreign investments.

After in January-May 2011, Bulgaria's FDI amounted to a negative EUR 26.9 M, the balance of investment appears to have been reversed in June 2011, reaching a positive EUR 7.9 M.

According to the Bulgarian National Bank, Bulgaria's meager H1 FDI is "mainly due to net payments on intercompany credits in accordance with the loan repayment schedules of enterprises."

The data of Bulgaria's central bank released Monday shows that the attracted equity capital (acquisition/disposal of shares and equities in cash and contributions in kind by non-residents in/from the capital and reserves of Bulgarian enterprises and receipts/payments from/for real estate deals in the country) for January – June 2011 amounted to EUR 296.1 M.

It decreased by EUR 152.3 M compared to that attracted in the same period of 2010 (EUR 448.5 M).

The receipts from real estate investments of non-residents amounted to EUR 97.7 M vs EUR 98.7 M in January-June 2010.

The other capital, net (the change in the net liabilities of the direct investment enterprise to the direct investor on financial loans, suppliers' credits and debt securities) was negative, amounting to EUR 380.3 M in January-June 2011, compared to a negative other capital, net of EUR 38.6 M in January-June 2010.

Based on preliminary data on profit/loss, the reinvested earnings (the share of non-residents in the undistributed earnings/ loss of the enterprise) in January-June 2011 were estimated at EUR 92 M, against EUR 122.8 M in the same period of 2010.

By country, the largest net direct investments in Bulgaria for the period January-June 2011 were those of the Netherlands (EUR 177.2 M), Cyprus (EUR 54.3 M) and Russia (EUR 52.3 M).

The net payments to Germany and the UK amounted to EUR 248.2 M and EUR 118.4 M, the BNB says, pointing out that the negative flows were due to net payments on intercompany credits in accordance with the loan repayment schedules of enterprises.

By sector, Bulgaria's largest investments for January-June 2011 were in "transport, storage and communication" (EUR 212.4 M). The largest net outflow in the reporting period were in manufacturing (EUR 397.3 M).

According to preliminary data in January-June 2011, Bulgaria's direct investment abroad amounted to EUR 31.6 M compared to EUR 89.3 million in January-June 2010.

Bulgaria's FDI continues to collapse after the country got only EUR 1.458 B in foreign investments in 2010, and EUR 3 B in 2009, down from the peaks in 2007 (EUR 9 B), and 2008 (EUR 6 B).

Topic: Financial

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