Monthly Report No. 05/2026 - FDI in Central, East and Southeast Europe

FDI in Central, East and Southeast Europe Editorial insight It will become important to upgrade the quality of FDI inflows by Robert Stehrer The CESEE region has experienced a sustained decline in FDI inflows, making the quality of the remaining investment more critical than ever. Attracting FDI that drives technology and knowledge transfer, upgrades skills, deepens integration into higher value-added segments of global value chains, and generates R&D and innovation spillovers will be an important element, on which a new growth model must be built. Chart of the month Global trade and FDI in 2025 globalisation is not ending yet by Branimir Jovanović Recent rumours of globalisation’s demise have been greatly exaggerated. Despite the war in Ukraine, geopolitical fragmentation and Trump’s tariffs, the 2025 data on global trade and FDI tell a more nuanced story globalisation may have plateaued, but has not gone into reverse. FDI in CESEE The downward trend continues by Olga Pindyuk In 2025, FDI inflows fell in most CESEE countries, both in absolute numbers and as a share of GDP. Romania emerged as one of the region’s prime investment destinations, while in Kazakhstan FDI inflows turned sharply negative. The latest data on greenfield project announcements indicate that investor sentiment is continuing to deteriorate, suggesting a further weakening of investment flows into the region in the near future. Important exceptions to this are metals and renewable energy. Macro snapshot Reinvested earnings dominate CESEE FDI, while dividends paint a fuller picture by Beata Borosak The newly published preliminary data on FDI trends in 2025 suggest that across most of CESEE established foreign investors continued to reinvest part of their income in equity, supporting FDI inflows especially in EU-CEE countries, even as dividend outflows remained high. This points to continued investor engagement, but also to substantial dividend distribution in many economies. Country in focus Why has FDI in Poland been declining of late? by Juliane Unger Poland’s FDI boom, driven by a one-off repositioning of supply chains following Russia’s invasion of Ukraine, proved short lived inflows have since been falling. While existing investors remain profitable and committed, new investment is being held back by rising labour costs, geopolitical uncertainty and global tariff volatility. Meanwhile, defence spending continues to rise and is increasingly shaping Poland’s economic landscape.