In a context where global foreign investment increased by 10.9% in 2013, in particular in Europe (+25.2%) and in Latin America (+17.5%), FDI flows to developing economies reached a new high of US$759 billion. However macroeconomic fragility and policy uncertainties are driving investors to caution.
Bulgaria attracts a certain volume of foreign cash flows, but since 2009 their level has been badly affected by the global and European crisis, particularly in the sectors of construction, real estate, financial intermediation and manufacturing. Foreign direct investment fell notably due to the Greek crisis of 2011 and 2012, Greece traditionally being an important investor in Bulgaria. Moreover, the European crisis dried up capital flows significantly. Considering all the advantages that Bulgaria provides, notably its fiscal plan with one of the lowest tax rates in the area and its labor costs, the country remains well-placed for foreign investments to revive again in 2014. The revival will nonetheless only be driven by the improvement of the economic situation of the EU countries, particularly of Bulgaria's closest neighbors. In 2013, the inward flow of FDI totalled USD 1. 899 billion.
Information on the 2013 FDI influx in this region can be accessed in the Global Investment Trade Monitor published in January 2014 by the United Nations Conference on Trade and Development (UNCTAD).
|Bulgaria||Eastern Europe & Central Asia||United States||Germany|
|Index of Transaction Transparency*||10.0||7.0||7.0||5.0|
|Index of Manager’s Responsibility**||1.0||5.0||9.0||5.0|
|Index of Shareholders’ Power***||6.0||9.0||5.0|
|Index of Investor Protection****||6.0||5.9||8.3||5.0|
Source: Doing Business - Last Available Data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
|Foreign Direct Investment||2011||2012||2013|
|FDI Inward Flow (million USD)||1,849||1,375||1,450|
|FDI Stock (million USD)||47,381||49,240||52,623|
|Performance Index*, Ranking on 181 Economies||45||-||-|
|Potential Index**, Ranking on 177 Economies||49||-||-|
|Number of Greenfield Investments***||94||64||66|
|FDI Inwards (in % of GFCF****)||16.0||12.6||12.8|
|FDI Stock (in % of GDP)||88.5||96.6||99.2|
Source: UNCTAD - Last Available Data.
Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.
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Last Updates: December 2014