FDIs in Bulgaria down 4 times to €44.2 mln in January on an annual basis

Foreign direct investments in our country declined more than 4 times during the first month of 2012. According to Bulgarian National Bank (BNB) data, published today, only €44.2 mln entered Bulgaria in January, compared to €186 mln for the same month of 2011.

An interesting fact is that South Korea displaced the Netherlands as the top investor in Bulgaria. In January, the Asian country invested €16.6 mln in Bulgaria, followed by €6.3 mln from the Netherlands and €4.3 mln from Russia. According to BNB experts, domestic companies paid off intercompany loans of €5.9 mln, the most sizable amounts of which went to Luxembourg and Cyprus. The reinvested profit for January totalled €8.9 mln, compared to €8.3 mln for the same month of 2011 and proceeds from investments of foreign persons in real estate for the period stood at €14.8 mln, compared to €5.7 mln at the beginning of 2010.

Generally, the decline in foreign direct investments is not a new trend for our economy – these have been decreasing over the last three years. According to preliminary data for 2011, they totalled €1.065 bn (2.7% of GDP), compared to €1.78 bn (4.9% of GDP) for January-December 2010, registering a 59% decline.

In January, Bulgaria’s exports shrank by 10.2% on an annual basis to €1.43 bn, BNB reported. These figures are quite disturbing since exports are the main engine of growth in our country.

According to BNB statistics, imports dropped by 0.3% to €1.6 bn in January. Another indicator is the overall trade balance, which reported a deficit of €176.4 mln in the first month of 2012, or nearly ten times higher than a year ago. Revenues from the export of services increased to a record-high €50.6 mln surplus, which is more than twice higher than in January 2011. Thus, the current account deficit stood at €112 mln, compared to €67 mln a year earlier. 2011 was the first in the past 16 years when the current account registered a surplus, i.e. exports exceeded imports.

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