Bulgaria's Jan-Nov 2010 FDI Three Times Smaller Y/Y

Bulgaria's net foreign direct investment in January-November 2010 saw a staggering collapse as it was only one-third of the FDI attracted in the same period of 2011.

According to preliminary data of the Bulgarian National Bank, the foreign direct investment in Bulgaria for January-November 2010 was EUR 894.7 M (2.5% of GDP), compared to EUR 2.782 B (7.9% of GDP) attracted in January-November 2009.

2007 was a record year for Bulgaria with a total of EUR 9 B of FDI, followed by EUR 6 B of FDI in 2008. The global economic and financial crisis led to what was considered a collapse of FDI in Bulgaria in 2009, as the foreign investments barely reached EUR 3 B. Government estimates from early 2010 expected FDI of EUR 2 B but apparently the net foreign investments will not exceed EUR 1 B even when December is factored in.

While the BNB shows that the inflow of foreign direct investments came to about EUR 2 B, the outflow of funds from Bulgaria is estimated at EUR about 1.1 B.

According to the BNB data, Bulgaria's 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-November 2010 amounted to EUR 1054.4 M.

It decreased by EUR 911 M compared to that attracted in the same period of 2009 (EUR 1.965 B).

The receipts from real estate investments of non-residents amounted to EUR 215.8 M, compared with EUR 513.9 M for the period January-November 2009.

The other capital, net (the change in the net liabilities of the direct investment enterprise to the direct investoron financial loans, suppliers' credits and debt securities) was negative, amounting to EUR 345.2 M in January-November 2010, compared to a positive other capital, net of EUR 618 M in the same period of 2009.

The difference is mainly due to the lower amount of the received intercompany credits for the compared to previous years and due to the payments on intercompany lending in accordance with the loan repayment schedules of enterprises.

By country, the largest net direct investments in Bulgaria for the period January-November 2010 were those of the Netherlands (EUR 1.273 B), Russia (EUR 108.2 M) and Cyprus (EUR 109.9 M).

The net payments from Bulgaria to Austria, the Netherlands Antilles and the UK amounted to EUR 825.4 M, EUR 102.1 M and EUR 186.2 M. The higher net receipts from the Netherlands and respectively net payments to Austria were mainly due to transactions associated with revolving intercompany credits.

In January-November 2010, Bulgaria's direct investment abroad increased by EUR 134 M compared to a decrease of EUR 114.8 million in January-November 2009.

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