Foreign Direct Investments in 2005

According to the data, which were published today October 9, 2006, by the Central Bank of Bosnia and Herzegovina (CBBH), the Foreign Direct Investments (FDI) in 2005 amounted to KM 823 million.

The CBBH Governor Kemal Kozarić stressed that this represents continuation of the positive trend from the previous years in terms of attracting foreign investments, and that the foreign investors continue to look at BH as attractive destination for their investments. Results from the previous year can be considered as favorable, since foreign investments amounted to over 5% of the GDP, although the level of investments is lower compared to 2004, when the major investment in Zenica took place.

Inflows of FDIs in previous years, as well as announcements of the major future investments in the energy sector, and the privatization of telecom companies, have a very favorable effect on improvement of the Balance of Payments position of the country.

The largest amount of the FDIs, in the amount of KM 427 million, came from Austria, followed by Slovenia with KM 144 million and Croatia with KM 81 million. Investments coming from these three countries make for 79% of the total FDI in 2005.

The latest annual research also compiled data on withheld incomes (reinvested profit) for 2004 and 2005. Withheld income in 2005 amounted to KM 108 million, which is 13% of the total FDIs. This concept is important for the Balance of Payment Statistics, since the amount of withheld incomes, which is assigned to direct foreign investors, has the similar financial effect as the new direct investments.

In terms of sector representation, the largest inflow of FDIs was recorded in the banking sector (50%), followed with companies in domain of production 26% and non-banking financial sector with 17% out of the total amount of the FDIs. Especially large increase was recorded in the banking sector, where investments amounted to KM 411 million, compared to KM 262 million which was recorded in 2004.

Also collected were the data on Foreign Investments Stocks at the end of 2005. Foreign Investments Stocks are the separate statistical category and it does not only represent the sum of all previous flows, it is also represents other changes such as foreign exchange differences, accounting changes, and other. Concluded with 31 December 2005, the FDI Stocks amounted to KM 4, 4 billion, while total foreign investments (including portfolio and other investments) amounted to KM 7, 3 billion.

Out of KM 4, 4 billion of the FDI, more than two thirds, 68%, is in the form of the ownership capital and the rest is in form of the inter-companies loans and other forms of investments.

The CBBH performs large quarterly and annual research through the direct compiling of the data from more then 700 companies and banks with the foreign investments in accordance with the international methodology. These data can differ from administrative data which were published earlier in BH.

The CBBH would like to thank the BH Ministry of the Foreign Trade and Economic Relations on their cooperation, as well as to the companies which provide data regularly. Detailed data on Foreign Investments flows in 2005, stocks at the end of 2003, 2004 and 2005, as well as revised data on foreign investments in 2004 can be found on the CBBH web page www.cbbh.ba

Public Relations Section
Coordinator
Zijada Kovač