Foreign investment down by 58% in a year

Foreign Direct Investment (FDI) in Bulgaria exceeded €1.359 bn (3.8% of GDP) in 2010, compared to €3.281 bn (9.4% of GDP) in 2009, registering a 58% decrease year-on-year. This became evident from the latest data of the Bulgarian National Bank (BNB) on the balance of payments for 2010. Meanwhile, direct investment abroad increased by €149.8 mln last year, while in 2009 it declined by €89.6 mln.

According to preliminary BNB data, the balance of payments deficit shrank almost by half in 2010 and stood at €383.9 mln, compared to €649.8 mln in 2009. However, the low level of FDI shows that Bulgaria’s economy has not begun to recover yet and foreign companies are still passive in terms of investments in our country.

Exports stood at €15.55 bn in 2010, compared to €11.69 bn in 2009, registering a 33% increase year-on-year, BNB data showed. In December 2010 alone, exports grew by 45% to €1.39 bn, compared to €961.8 mln for December 2009. Imports amounted to €17.95 bn, compared to €15.87 bn for 2009, increasing by 13.1% on an annual basis. In December alone, imports exceeded €1.72 bn, compared to €1.34 bn for December 2009, and increased by 28.3% on an annual basis.

According to BNB data, a trade deficit was again registered in 2010, amounting to €2.401 bn (6.7% of GDP), compared to the deficit of €4.173 bn (11.9% of GDP) for 2009.

The money under the ‘current transfers – credit’ item, which summarizes the transfers made by Bulgarians working abroad to our country and the remittances from EU funds in 2010, totaled €2.130 bn, or 38.4% more than in 2009. The overall revenues of companies providing services and the payments for services by foreign suppliers were €1.89 bn, up from €1.29 bn for 2009.

The current account deficit at the end of 2010 stood at €282.7 mln, down from €3.477 bn 12 months earlier. BNB’s data showed that, despite the dramatic decline in FDI in our country, its volume still exceeds several times Bulgaria’s current account deficit.

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