FDI closer to EUR 1 bln mark

Data from the EU statistical service Eurostat show that combined inward foreign direct investment into Cyprus reached EUR 900 mln in 2005, tantalisingly close to the 1 billion mark.

Just over half of the investment, EUR 0.5 bln, came from other EU member states, while the remaining EUR 0.4 bln came from outside the EU.

No breakdown of countries was given.

Also, unfortunately, strict comparisons with 2004 are not possible, as almost all the data points for 2004 are marked “confidential”.

A “confidential” flag often means that there was one big foreign investment from one big company in one country and it would be too obvious to everyone how much X company paid to acquire Y company if the number was actually publicised.

All we know is that around EUR 0.1 bln came from the US in 2004.

Separate data from the Central Bank of Cyprus show that inward FDI rose by a respectable 7% in 2005 to CYP 541.2 mln from CYP 505.7 mln in 2004. According to our calculations, that’s 7% of GDP, and therefore big enough to cover the 5.9% of GDP hole known as the current-account deficit.

There has also been a fair amount of investment from Cyprus abroad, although less than in 2004.

In 2005 outward foreign direct investment amounted to ER 0.4 bln, split evenly between EU and non-EU countries.

In 2004 it was EUR 0.5 bln, wiht EUR 0.3 bln going to the EU and EUR 0.2 bln going outside the EU.

Fiona Mullen