Monthly Report No. 11/2024 - FDI in Central, East and Southeast Europe

Marcus How and Olga Pindyuk

No 2024-11, wiiw Monthly Reports from The Vienna Institute for International Economic Studies, wiiw

Abstract: FDI in Central, East and Southeast Europe Geo-economic uncertainty taking its toll by Olga Pindyuk Long-term FDI developments in CESEE point to a structural shift in many countries, especially in Central Europe. Recently, investor confidence in the region has been badly affected by rising uncertainty. Data on greenfield investment projects announced reveal a significant weakening of investment performance in most countries of the region. China has been cementing its role as the biggest investor in the region. Navigating political risks The resilience of FDI in Hungary’s evolving economy by Marcus How Hungary has experienced institutional decline under Prime Minister Viktor Orbán’s administrations, while nationalisation and ‘indigenisation’ have reduced FDI in sectors such as banking, utilities and energy. However, FDI in manufacturing and construction has remained stable – or has even grown – due to discretionary policy incentives. Despite the overall political risks, Hungary’s FDI inward stock exceeded EUR 100bn by 2023, with robust macroeconomic fundamentals, a low rate of corporate tax and the country’s EU membership serving to attract investors. Forecasts of main economic indicators for Central, East and Southeast Europe for 2024-2026

Keywords: foreign direct investment; greenfield projects; political risks; foreign direct investment; nationalisation; indigenisation (search for similar items in EconPapers)
Pages: 34 pages including 6 Tables and 21 Figures
Date: 2024-11
New Economics Papers: this item is included in nep-eec and nep-mac
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