Encouraging Inflow of Direct Foreign Investments in 2004

The Central Bank of Bosnia and Herzegovina (CBBH) has published statistical data on foreign investments in 2004, during which the direct foreign investment inflow in the amount of KM 956 million has been recorded. Governor of the CBBH Kemal Kozarić stressed that these are encouraging data and that the inflow of direct foreign investment has increased by 45% compared to 2003, which is the evidence of the increased interest of foreign investors for BH, which has a positive effect on economic growth.

Also in 2004, the largest number of direct foreign investments in the amount of KM 356 million came from Austria, followed by the Netherlands Antilles in the amount of KM 251 million and Croatia in the amount of KM 81 million. These three countries account for 72% of the total direct foreign investments.

Foreign investments were increasing over the year to reach KM 414 million in the fourth quarter of 2004.

In respect to sectors' share, the shift has been noticed in terms of larger investing into production - 50%, only to be followed by banking with 25% and non-banking financial sector with 9% of the total amount of direct foreign investments.

Also, the data on foreign investment stocks at the end of 2004 have been compiled. The foreign investment stocks is a special statistical category and it does not only represent the sum of all the previous flows but also all other changes, such as foreign exchange differences, accounting changes and other. Foreign investment stocks in BH as of December 31, 2004, was KM 5, 9 billion, out of which, KM 3, 8 billion are direct foreign investments and KM 2, 1 billion are portfolio and other foreign investments.

Out of KM 3, 8 billion of direct foreign investments, over two thirds - 68% is in the form of the ownership capital, while the rest is in the inter-company loans and other forms of investing.

The CBBH conducts a detailed quarterly and annual research through direct compiling of the data from companies and banks with foreign investments in accordance with the international methodology. Through this research, more than 600 companies and banks with foreign investments of over KM 100.000 were covered while estimates were made for others. Internationally recognized concepts on foreign investments were used and these data may be different from the administrative data which were published in BH earlier.

The CBBH would like to thank to the Ministry of Foreign Trade and Economic Relations for cooperation as well as to companies which send their data regularly. More detailed data on foreign investment flows in 2004, foreign investment stocks at the beginning and the end of 2004 and revised data on the balance of foreign investments in mid 2003 are available at the CBBH web site (http://www.cbbh.ba/bh/statistika.html).

Public Relations Section
Almir Salihović