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Slovenia Saw FDI Inflows Drop in 2009

Ljubljana/Geneva, 22 July (STA) - Slovenia's inward and outward flows of foreign direct investment (FDI) dropped significantly amidst the financial and economic crisis in 2009, according to a report by the United Nations Conference on Trade and Development (UNCTAD) released on Thursday.

Slovenia actually saw negative inward FDI of US$67m in 2009, whereas it had attracted US$1.924bn in new FDI the year before, Andreja Jaklic of the Ljubljana Faculty of Social Sciences told the press.

Outward FDI (what Slovenian companies invest abroad) meanwhile dropped to US$868m from US$1.366bn the year before, according to the World Investment Report 2010.

Slovenia remains high in the ranking by inward FDI potential (34th among 190 countries), but in the rankings of actual FDI performance it plunged from 77th to 138th.

As Jaklic noted, all surveys of the business environment in Slovenia highlight labour market rigidity, high taxes and contributions and complex paperwork as the main obstacles to FDI.

However, she pointed out that bureaucratic obstacles were being removed in the recent years.

Inward FDI stocks, the total value of FDI in Slovenia, dropped 4% last year to US$15.24bn. Outward FDI stock, which shows how much Slovenian companies have invested abroad, rose 11% to US$8.75bn.

In relative terms inward stocks accounted for 41.4% of GDP, which is on par with the average for developed economies, and outward FDI stocks 18% of GDP, which is significantly below the average.

Both figures, however, put Slovenia near the bottom of the rankings of European countries.

In global terms, the UNCTAD report suggests that inward FDI flows dropped 37% last year to US$1,114 bn, with outward flows plunging by 43% to US$1,101bn.

Investment activity is set to recover this year, with inward flows expected to rose to US$1,200bn.

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