Montenegro’s net FDI declines 36% y/y to EUR 268mn in Jan-Nov 2013

By bne IntelliNews January 22, 2014

Net FDI inflow to Montenegro shrank 36.3% y/y to EUR 268.4mn in January-November 2013, deteriorating from a 25.7% y/y decrease as of end-October, due to falling equity investments which offset higher inter-company lending, the central bank (CBCG) said in its monthly bulletin. The reading equalled to 8.1% of the full-year GDP forecast according to IntelliNews calculations.

The 11-month FDI inflow totalled EUR 406.3mn, the central bank said without giving an annual comparison. Investments in equity dropped by 34.9% y/y to EUR 227.8mn in January-November. Out of the total, investments in real estate amounted to EUR 181.0mn, while the remainder (EUR 46.8mn) was invested in banks and companies. The FDI inflow in the form of intercompany debt climbed 15.8% y/y to EUR 167.7mn. Its share in the total FDI inflow was 41%.

FDI outflows jumped 31.1% y/y to EUR 137.9mn in January-November. Out of the total, withdrawal of non-residents investments stood at EUR 117.8mn and mainly referred to falling intercompany debt, the CBCG said. The remainder of the FDI outflow was generated by investments of Montenegrin residents abroad (EUR 20.1mn).

Net FDI in Montenegro climbed 16.6% y/y to EUR 453.6mn in 2012, accounting for 13.6% of the GDP. The rise followed two years of contraction and was supported by higher investments in the real estate, banking and corporate sectors. Yet, it remained below its level in 2008 when it stood at around 20% of GDP.

The FDI to GDP ratio in Montenegro remains substantially higher than in some other countries in the region. In 2012, net FDI in neighbouring Serbia accounted for only 0.8% of GDP, in Bosnia it stood at 3.5% and in Romania was 1.2%.

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