The survey ranks Croatia 28th in Europe and shows that FDI into Croatia contributed to the creation of 2,585 jobs last year, an EY press release said on Wednesday.
FDI into Europe in 2022 was up only 1% from 2021, but remained 7% below the pre-COVID-19 level in 2019. Throughout 2022, businesses around the world announced 5,962 greenfield and expansion projects in 44 European countries, compared with 5,877 in 2021.
In conditions of rising inflation, energy supply and other costs, weaker economic growth and geopolitical developments in eastern Europe, the 53% rise in FDI into Croatia is "an outstanding success," Tomislav Čutura, head of strategic and transaction services at EY Croatia, said in the press release.
Rising interest rates, high inflation and relatively high public debt levels are the main reasons of investor caution, the survey shows. Despite that, investors are increasingly turning to southern and eastern Europe, including Croatia.
In Croatia, most of the investments were made in new projects, while a smaller number was made into the expansion of existing ones. Most of the FDI projects in Croatia were in transport, the IT industry and pmanufacturing
At the European level, the IT industry accounted for the largest share of FDI (20%) in 2022, followed by business services and manufacturing. Over 60% of FDI in European countries came from European companies, while non-European ones were more cautious about the European market.
Most of the FDI into Croatia came from Germany and the United States, followed by Italy, the UK and Ukraine, Čutura said.
Croatia's as well as Europe's key ambition should be the creation of favourable conditions for doing business and further investment in the development of a digital and sustainable society, he said, adding that the demand potential and number of FDI projects planned for this year indicate that the post-pandemic recovery was not lost and that a long-term growth of FDI into Croatia can be expected.
Croatia is just undergoing a digital transformation and European market trends show that the IT industry and investment in renewables are the most interesting to foreign investors, which is why the positive FDI trend is likely to continue, Čutura said, adding that it is up to Croatia to create even better conditions for it.