Dutch companies dominated the 2011 list of foreign investors into Croatia according to data provided by the Croatian National Bank. They invested €256.9 million from a total of €1.04 billion recorded in the CNB statistical data. The central bank warns these data also include ‘round-trip’ investment that increased foreign investment by the same amount in both directions (in Croatia and abroad). Notwithstanding, €0.13 billion represents a significant increase since foreign investment totalled €293.5 million in 2010.
Germany takes second position on the list of investors at €220.2 million, followed by Austria at €217.8 million. Austrian leading investors are also included in the data that has been maintained since 1993. They invested a total of €6.3 billion in Croatia, considerably more compared with the Dutch, the second-runners on the “eternal list” with foreign investment totalling €3.9 billion. The German share stands at €3.2 billion invested during a period of 19 years. Luxembourg is fourth in terms of 2011 investment with €142.2 million, with Italy at €103.6 million.
2011 total investment of €1.04 billion is only slightly higher compared with 2004 results when the total was €127 million. From then until 2010, investment had exceeded this amount every year, reaching its peak in 2008 with €4.2 billion. Concerning sectors, investment in banks and financial intermediation reached €267.3 million pushing overall investment to €8.7 billion over a period of 19 years. Investment in this area exceeds others by far in terms of value: in comparison, wholesale trade and trade intermediation stood at €2.5 billion. Last year, real-estate operations brought in €246.4 million, chemicals production €236.8 million and equity investment in real estate, €146.3 million.
CNB experts explain that the majority of income in the last quarter of 2011 related to foreign equity investment (€0.9 billion). However, a significant level of investment in Croatia related to the transformation of debt into equity shares in several local companies, while direct investment in new production capacity was extremely modest (only €100 million). In addition to €66.9 million invested into the production of oil derivatives, other dominant activities include textile production (€31.5 million), agriculture (€33.9 million), leather and footwear production (€11.7 million) and the metal industry (€9.5 million).
Analysts relate the decreasing value of foreign investment during the past several years with the economic crisis that changed the course of many investment plans on European and global financial markets. The reason is partly due to the fact that most foreign investment took place during a time when the Croatian market had just started to open in many sectors, creating more opportunities for takeovers and new investment. This refers to, for example, the banking sector, pharmaceutical industry (where more foreign investors competed for Pliva), energy (INA), telecommunications and IT industry (Hrvatske telekomunikacije, and Nikola Tesla). Capital then headed for other eastern countries in search of similar acquisitions.