Thursday, February 5, 2009

Brokered FDI down by Nearly 60% in Slovakia

Slovak investment agency Sario brokered almost sixty percent less foreign direct investment (FDI) last year compared to 2007. The amount of negotiated investment decreased from €1.28 billion to only €538 million (0.8% of GDP). Official central bank statistics of FDI inflow indicate a similar decline – by almost a third for the first ten months of the last year. However, the central bank data is often revised and contains estimates, which makes the overall numbers less reliable.
The reason for FDI inflow decline is that many companies scaled back their expansion plans due to global financial crisis. Japanese electronics manufacturer Sony, for instance, has been one of those belonging to this group. Other projects have been put on hold by hesitant firms facing uncertain times. Yet, there were a few significant large investments announced. For example, Bratislava-based plant of Volkswagen announced expansion worth €300 million last year.
Sario officials say that 2009 could witness resumption in FDI flows thanks to the Slovak adoption of common currency Euro as of January 1 this year. The agency is currently working on 122 projects bringing potentially more than € 2 billion of capital into the country. Five of the projects exceed € 300 million in value.

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