A dramatic 20% decrease in foreign investment for 2012

Foreign direct investment (FDI) in Bulgaria amounted to almost €1.4 bn in January-December 2012 according to preliminary data of the Bulgarian National Bank (BNB). Their size for 2011 was approximately €1.75 bn, i.e. the decrease from the previous year is drastic – 20%. The year 2012 was another consecutive year with a decline in FDI after the peak of over €6 bn registered in 2007-2008.

In Q4 2012, FDI grew by the trifling €21 mln, while October-December 2011 was the strongest investment period when FDI exceeded half (€1 bn) of the total FDI for the year. In December 2012, the situation was even more pessimistic – FDI dropped by €97 mln, while in the same month of the previous year FDI amounted to €530 mln.

Q1 2012 was the strongest quarter in terms of investment, which totaled €501 mln. FDI in Q2 and Q3 2012 amounted to €450 mln and €426 mln, respectively. Probably due to the steady inflow of FDI until September 2012, economists predicted an increase in investment of at least 10% on an annual basis but these forecasts did not come true.

In 2012, the highest FDI in Bulgaria came from the Netherlands (€475 mln), Luxembourg (€390 mln), Switzerland (€169 mln) and Russia (€166 mln). The largest net outflow of investment was to Austria (minus €167 mln), the UK (minus €92 mln) and Greece (minus €90 mln).

According to preliminary data, Bulgaria’s FDI abroad rose by almost €170 mln last year, i.e. the growth registered in 2011.

Bulgaria’s foreign trade balance for the January-December 2012 period was negative, with a deficit of almost €3.6 bn, compared to a deficit of almost €2.16 bn for 2011 (an increase of over 30%), according to BNB’s data. The foreign trade balance for December 2012 reported a deficit of €329 mln, i.e. the deficit for the month was almost the same as the deficit on an annual basis.

In 2012, Bulgaria’s exports amounted to €20.8 bn, increasing by only 2.6% (€527.5 mln), compared to 2011. The volume of imports into our country was €24.39 bn last year, having increased by 8.8% (nearly €1.97 bn), compared to 2011.

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