SEE Region
The SEE region - Serbia, Croatia, Montenegro, Macedonia, Bosnia & Hercegovina and other SEE countries Bulgaria Romania Greece Turkey Albania - is rich with opportunity and potential. It is experiencing significant improvements in terms of reforms, economic growth and foreign direct investment (FDI).
Economic Development
The region has made strong progress, outpacing Central Europe in economic growth with an average GDP increase of more than 5 percent in 2005. The markedly strong economic development is expected to continue in the next several years. Inflation has largely been kept under control, and is expected to decline further in the immediate future. The region’s improving risk profile and economic outlook are also validated by the international credit ratings. As unemployment is still high, sustainable economic growth and job creation are the major challenges the region faces.
FDI into the region was EUR 3.4 billion in 2005. Croatia, Serbia and Montenegro registered increasing inflows; the other countries booked slight declines compared to 2004. The cumulative FDI inflow in the region is near EUR 15 billion for the five-year period of 2001-05. As the countries of the region rarely invest abroad, net FDI inflows also play a key role in financing foreign trade imbalances that stem from ongoing structural reforms and significant investment demand in the transition to free markets.
Investment Opportunities
As the European Union (EU) expands to the east and south, the Western Balkans is considered by many current and prospective investors to offer opportunities as Europe’s next high-growth business location. Croatia and FYR Macedonia are candidates for EU membership, and Stabilization and Association Agreements are in force or under negotiations for the other countries of the region.
The characteristics driving investment in this region include:
- Access to a growing market of over 150 million consumers
- A competitive business environment, with labor costs under the levels of the Czech Republic and Hungary in parts of the region
- Abundant availability of a highly skilled and well-educated workforce
- Economic reforms delivering an enhanced investment climate
- First-mover advantage to those entering the market at the front end of a growing wave of investment
