Bulgaria experienced a significant downturn in net foreign direct investment (FDI) in the first quarter of 2024, plummeting to €358.9 million from €1.94 billion in the same period last year, according to data released by the Bulgarian National Bank (BNB).
The sharp decline in net FDI inflow represents a staggering 81% decrease compared to the previous year. In March alone, Bulgaria recorded a net FDI inflow of €150.6 million, a notable decrease from €1.18 billion in the same month of 2023.
The net FDI inflow in January-March, calculated as per the directional principle, accounted for only 0.4% of Bulgaria’s projected gross domestic product (GDP) for 2024, contrasting sharply with the 2.1% represented in the first quarter of 2023.
Austria emerged as the leading contributor to net FDI inflows into Bulgaria during the review period, with investments totaling €122.2 million. Italy and Greece followed closely, with direct investments of €115.4 million and €70 million, respectively.
However, Bulgaria also witnessed substantial net outflows of FDI, with the highest amounts directed to Russia (€174.2 million) and Germany (€154.3 million).
The significant decline in FDI inflows poses challenges for Bulgaria’s economic growth and development prospects. Factors contributing to this downturn may include economic uncertainties, changes in investment policies, and global market conditions.
The Bulgarian government may need to reassess its strategies to attract and retain foreign investments, focusing on enhancing the investment climate, improving regulatory frameworks, and promoting sectors with high growth potential.
As Bulgaria navigates through these challenges, policymakers and stakeholders will need to collaborate effectively to revitalise FDI inflows and support sustainable economic growth in the country.
