North Macedonia witnessed a significant downturn in Foreign Direct Investment (FDI) inflows during 2023, totaling €616.7 million, a notable 17% decrease compared to the preceding year. This revelation, as unveiled by data from the country’s central bank, sheds light on the evolving economic landscape of the region.
The final quarter of 2023 saw FDI inflows amounting to €232.6 million, primarily attributed to intercompany lending activities. Additionally, increased investments in equity amounted to €49 million, suggesting pockets of resilience within the market amidst broader challenges.
This decline starkly contrasts with North Macedonia’s previous stellar performance. Just a year earlier, the country had attracted over 11 times its fair share of inward greenfield FDI, positioning itself as a burgeoning investment destination. However, data from GlobalData’s FDI Database paints a concerning picture, revealing a 40% decline in greenfield investment volumes in 2023, particularly in sectors such as technology and renewable energy.
Commenting on the downturn, Glenn Barklie, Head of FDI Services at GlobalData, identified a slowdown in tech and renewable energy projects as primary drivers. Nevertheless, Barklie emphasised North Macedonia’s resilience, noting that despite the setback, 2023’s FDI levels remained above pre-Covid times.
North Macedonia’s FDI landscape has been marked by volatility in recent years, largely influenced by the disruptive effects of the Covid-19 pandemic. According to UNCTAD’s World Investment Report 2023, FDI values fluctuated from a peak of €670.97 million in 2018 to a trough of €212.86 million in 2020, reflecting the broader global economic turbulence.
As North Macedonia navigates these challenges, stakeholders are urged to adopt proactive measures to stimulate investment and foster economic growth. Strategic reforms, targeted sectoral incentives, and enhanced investment promotion efforts are imperative to revitalising FDI inflows and positioning the country as an attractive investment destination in the post-pandemic era.
