Central and Eastern Europe shows resilience amid global FDI challenges
Central and Eastern Europe (CEE) has demonstrated notable resilience in attracting foreign direct investment (FDI) despite ongoing global uncertainties and a decade-long decline in worldwide FDI, according to Joachim Arnold, deputy CEO of FDI advisory firm OCO Global. Speaking at the CEE Summit In Warsaw on June 5th, Dr Arnold provided an in-depth overview of FDI trends, highlighting the evolving dynamics shaping investment flows in the region.
“FDI has seen a steady decline over the past decade,” he explained. “Post-pandemic, investment levels have stabilised but growth remains modest — expected between zero and eight percent this year — due to persistent global uncertainty delaying decision-making.” However, he emphasised that CEE has bucked this trend, increasing its share of global FDI projects by 13% between 2015-2019 and 2020-2024.
Europe remains the dominant source of investment in the region, with Germany contributing 16% of all FDI projects, followed by the UK. The US leads as the primary non-European investor, while Asian investment — although smaller in volume — has seen significant projects in Hungary’s electric vehicle and battery sectors, signaling growing interest from China, Japan and Korea.
Sector-wise, CEE maintains strong activity in automotive, aerospace, energy and business services. The automotive sector’s regionalisation reflects supply chain shifts, while aerospace benefits from increased post-pandemic demand and defense spending. Business services continue to drive investment through outsourcing and corporate functions, reinforcing the region’s value proposition.
Dr Arnold also highlighted the critical role of talent availability in attracting investment. As prime cities become saturated, secondary cities in Southeastern Europe, such as Serbia and North Macedonia, are gaining traction despite logistical challenges. He noted that geopolitical risks and rising trade barriers have prompted some investors to consider alternative “safer” markets like Portugal and Morocco, potentially reshaping FDI flows.
Looking ahead, Dr Arnold forecasts moderate growth aligned with pre-pandemic trends, driven by regionalisation in key industries such as semiconductors. He stressed the importance of investment promotion agencies (IPAs) working closely with the real estate sector to provide investor-ready sites, infrastructure and personalised support — especially for Asian investors who prioritise service and speed over cost.
“Regions that win the deal are those that speak the investor’s language and are ready to act fast,” he concluded. “Talent availability, quality of life, and a strong support network are critical to sustaining investment in Central and Eastern Europe.”
