LONDON, Oct 11 (Reuters) - The recovery in foreign direct investment into emerging Europe from the global financial crisis is lagging that of its portfolio inflows as the region nurses a fragile economic revival while struggling with high debt and austerity measures.
Though ultra-low interest rates in major economies such as the U.S. and Japan have impelled capital towards emerging markets, investors remain wary of eastern and central Europe which was hard-hit by the global financial crisis, when Hungary, Romania and Ukraine were bailed out by the International Monetary Fund (IMF).
Capital flows to the region are likely to triple this year to more than $180 billion from last year but will remain a third lower than the 2004-2008 average, data from the Institute of International Finance shows.
(In US$ billions, all net amounts)
2007 2008 2009 2010f 2011f EMERGING EUROPE Private flows 444.8 260.0 60.7 182.5 229.6 Direct investments 125.6 125.9 61.9 84.1 102.4 Portfolio equity flows 19.8 - 14.8 7.5 12.1 14.4 BULGARIA Private flows 20.7 17.3 4.2 - 1.3 4.5 Direct investments 8.7 5.9 3.5 1.0 2.2 Portfolio equity flows 0.1 - 0.1 0.0 0.1 0.2 CZECH REPUBLIC Private flows 21.3 13.8 5.2 7.5 8.7 Direct investments 9.5 3.5 5.3 5.1 6.1 Portfolio equity flows - 0.3 - 1.1 - 0.3 - 0.4 - 0.3 HUNGARY Private flows 24.6 26.8 8.6 8.1 7.9 Direct investments 4.4 6.2 4.0 5.8 6.5 Portfolio equity flows - 5.0 - 0.2 1.0 0.8 1.0 POLAND Private flows 60.6 37.2 39.3 39.9 38.7 Direct investments 17.1 8.9 7.9 15.3 14.7 Portfolio equity flows - 0.5 0.6 1.4 2.5 2.9 ROMANIA Private flows 31.1 26.4 1.1 10.4 12.2 Direct investments 5.3 8.2 3.8 4.9 4.8 Portfolio equity flows 0.7 0.0 0.3 0.3 0.4 RUSSIA Private flows 195.0 70.9 7.6 67.5 96.8 Direct investments 50.5 66.5 25.2 38.5 49.0 Portfolio equity flows 18.8 -15.0 2.4 6.7 6.8 TURKEY Private flows 62.6 38.3 -1.4 40.5 48.2 Direct investments 21.3 17.6 7.7 8.5 13.5 Portfolio equity flows 5.1 0.7 2.8 2.0 3.2 UKRAINE Private flows 28.9 29.3 -4.0 10.0 12.6 Direct investments 8.8 9.0 4.5 5.0 5.7 Portfolio equity flows 0.7 0.4 -0.1 0.1 0.2 (Data from The Institute of International Finance, compiled by Sebastian Tong, edited by Stephen Nisbet)