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Flow of FDI to ČR down 60% yr/yr at CZK 56.5bn
( 13 / January / 2010 )
Prague, Jan 12 (CTK) - Flow of foreign direct investment (FDI) to the Czech Republic fell by 60 percent year-on-year to Kc 56.5bn in Q1-Q3 last year, according to an analysis of the Czech economic development released by the Czech Industry and Trade Ministry Tuesday.
In Q1-Q3 2008, FDI amounted to Kc 138.3bn, the ministry said.
In Q1 2009 alone, FDI was worth Kc 36bn, which was an increase of Kc 7.2bn on the year.
Of the total volume of FDI in Jan-Sept 2009, Kc 14bn was invested into share capital, while in Q3 alone only Kc 42.1m. Reinvested profit reached Kc 85.7bn in Q1-Q3 last year, other capital fell by Kc 43.1bn.
In the first nine months of 2009, a fall in FDI was registered in the Czech manufacturing industry, where FDI dropped from Kc 12.9bn in H1 2009 to Kc 2.1bn.
The share of Germany, which is the most important investor in the Czech Republic, decreased from H1's 52.1 percent to 36.7 percent. By contrast, Austria's investment increased, reaching a total of 32.1 percent of all FDI inflows to the country last year.
Investments from France and Slovakia came next.
FDI from the USA amounted to Kc 6.1bn in the first nine months of 2009, which is a further increase from Kc 4.7bn from H1 2009, the ministry said.
Investment into real estate and services for companies registered the highest inflow of FDI, totalling Kc 11.8bn in Q1-Q3 2009. The volume of investment into financial mediation fell from H1's Kc 7.1bn to Kc 6.7bn, thus reaching nearly the same level of investment as manufacturing industry, retail and repairs, the ministry said.
Czech investments abroad amounted to Kc 54.1bn in Q1-Q3 last year. Of that, Kc 25bn was invested into share capital, Kc 23.1bn was reinvested profit and other capital was Kc 6bn.
In Jan-Sept last year, Czech investors invested most into the electricity, gas and water sector, a total of Kc 18.5bn. Second was investment into extraction of minerals, which reached nearly Kc 6bn.
The Czech Republic invested most into share capital in Turkey (over Kc 9bn), Germany (Kc 6.3bn) and Romania (Kc 5.9bn).
The current trend in FDI is in contrast with the beginning of the decade when strong FDI inflows were the driving force behind the Czech economy. The economic crisis is responsible for lower volumes of investment.
The Czech Republic is undergoing the worst economic downturn since the end of the 1990s. Some analysts estimate that about a fifth of foreign firms are considering to leave the Czech Republic to search for places where production is cheaper.
In 2008, FDI fell by 1.5 percent on the year from 2007's Kc 185.3bn to Kc 182.8bn.
Source: ČTK