Five bumper years of foreign direct investment (FDI) in Central and Eastern Europe took a hammering last year as the effects of the credit crunch and recession bit, according to PricewaterhouseCoopers economists.
The evidence suggests that FDI in the region is likely to recover only modestly from 2010 onwards, says the report entitled Foreign Direct Investment in Central and Eastern Europe: A case of boom and bust?
The PwC research reveals that the CEE region enjoyed a five-fold increase in FDI inflows between 2003 and 2008, rising from US$30 billion to US$155 billion. Russia has been the major beneficiary, as inflows here rose from less than US$8 billion in 2003 to more than US$70 billion in 2008.
But estimates show that in 2009, FDI to the region slumped by 50% to US$77 billion. Much of the blame for this collapse can be laid at the door of the real estate sector, where FDI declined by a massive 71% in 2009 compared to the previous year.
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