According to preliminary estimates released today by UNCTAD, inflows and outflows of foreign direct investment (FDI) in Central and Eastern Europe reached new records in 2000. Inflows increased from $25 billion in 1999 to $27 billion in 2000 (figure 1). Outflows grew even faster, reaching a record $4 billion in 2000, up from $3 billion in 1999. As in previous years, the bulk of these outflows -- $3 billion - was registered by the Russian Federation alone.
For the first time, in 2000 the region´s gross domestic product growth became an engine of FDI inflows. Privatization-related FDI transactions were another important factor, with the exception of Hungary, where privatization has been by and large completed, and the Commonwealth of Independent States, where large-scale foreign privatization has not yet begun.
The FDI share of total investment in the region is increasing: as a percentage of gross domestic capital formation, FDI inflows reached more than 17% by the end of the 1990s, twice as high as in 1994 (figure 2).
The forthcoming World Investment Report 2001, to be launched by UNCTAD in September, will analyse these estimates further and provide details at the country, regional and international levels. The main theme of this year´s report is FDI linkages to local enterprises.
