BULGARIA CRIPPLED BY NEGATIVE FDI INFLOW IN JAN-APRIL 2011

Bulgaria registered a negative foreign direct investment inflow of EUR 62.5 M in the first four months of 2011, according to latest data of the Bulgarian National Bank (BNB).

The central bank points out that the outflow of FDI from Bulgaria is "due to net payments on intercompany credits in accordance with the loan repayment schedules of enterprises, according to preliminary data.

Thus, the foreign direct investment in Bulgaria in January-April 2011 decreased by EUR 441 M year-on-year - EUR 62.5 M (0.2% of GDP) in the first four months of 2011 compared to EUR 378.9 M (1.1% of GDP) attracted in January-April 2010.

Bulgaria's FDI continues to collapse after the country got only EUR 1.458 B in foreign investments in 2010, and EUR 3 B in 2009, down from the peaks in 2007 (EUR 9 B), and 2008 (EUR 6 B).

The BNB data released Wednesday indicated that Bulgaria's attracted Equity Capital (acquisition/disposal of shares and equities in cash and contributions in kind by non-residents in/from the capital and reserves of Bulgarian enterprises and receipts/payments from/for real estate deals in the country) for January – April 2011 amounted to EUR 234.7 M. It decreased by EUR 56.2 M compared to that attracted in the same period of 2010 (EUR 290.9 M).

The receipts from real estate investments of non-residents amounted to EUR 52.1 M against EUR 49.9 M in January-April 2010.

The other capital, net (the change in the net liabilities of the direct investment enterprise to the direct investor on financial loans, suppliers' credits and debt securities) was negative, amounting to EUR 361.4 M in January-April 2011, compared to a positive other capital, net of EUR 8.6 M in January-April 2010.

Based on preliminary data on profit/loss, the Reinvested Earnings (the share of non-residents in the undistributed earnings/ loss of the enterprise) in January-April 2011 were estimated at EUR 64.2 M, against EUR 79.4 M in the same period of 2010.

By country, the largest net foreign direct investments in Bulgaria for the period January-April 2011 were those of Austria (EUR 116 M), Cyprus (EUR 46 M) and Spain (EUR 35.7 M).

The net payments to Germany, the UK and Japan amounted to EUR 108.6 M, EUR 108.3 M and EUR 50.3 M. The negative flows were mainly due to net payments on intercompany credits in accordance with the loan repayment schedules of enterprises, the BNB says.

According to preliminary data in January-April 2011, Bulgarian direct investment abroad amounted to EUR 24.5 M compared to EUR 38.8 M in January-April 2010.