Investments in the period of pandemic: 50% of companies continue to implement planned investments in BiH

During 2020, the Foreign Investment Promotion Agency (FIPA) of Bosnia and Herzegovina carried out an Aftercare online questionnaire with existing investors and received information according to which, 50% of foreign investors confirm the implementation of planned investments in BiH agreed before the pandemic, 40% will most likely postpone the planned investments, two companies plan to relocate one part of their business activities outside BiH, and the ones will completely stop investment activities. 

According to contact with companies, certain investment plans will be delayed or slowed down for a while in order to compensate for certain losses and overcome the additional risk and uncertainty of business. Apart from companies related to the service sector, certain producers and exporters are most affected by the pandemic. In the situation of global closing of borders, many companies had to reduce or completely suspend production due to the impossibility or difficulty of procurement or import of raw materials. For the same reasons, companies whose business is mostly export-oriented were also affected.

According to estimations and announcements of relevant international organizations, foreign direct investment could have a decline of up to 40% globally, in the coming period 2020/2021, which will certainly have a negative impact on the inflow of foreign direct investments in BiH.

According to the official data of the Central Bank of BiH, foreign direct investments in Bosnia and Herzegovina in 2019 amounted to 699 million BAM or 357 million EUR.

The countries that invested the most in Bosnia and Herzegovina in 2019 were Russia (211 million BAM) and Croatia (117 million BAM). The same countries were also the biggest investors in 2018.

The following countries registered significant capital increases in 2019 (over BAM 20 million): Great Britain (85 million BAM), Austria (61 million BAM), Luxembourg (28 milion BAM), Saudi Arabia (22 milion BAM) and Slovenia (20 million BAM).