Although the inflow of foreign direct investment into the countries of Central, Eastern, and Southeastern Europe rose to 91.5 billion euros in 2025 compared to 75.8 billion euros the previous year, most countries in the region saw a decline in FDI both in absolute terms and as a percentage of GDP. This was reported by the Vienna Institute for International Economic Studies (wiiw).
Romania Leads the Way
The overall growth is largely driven by an increase in foreign direct investment in Romania, where FDI inflows rose to 8.1 billion euros in 2025 from 5.6 billion euros in 2024, according to the wiiw report.
“The sharp 45% increase in foreign direct investment in Romania underscores the country’s appeal to investors, despite the current economic and political crisis,” said Olga Pindyuk, an economist at wiiw, in a press release accompanying the report, which covers 23 countries in Central and Eastern Europe, including Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Kosovo, Moldova, Montenegro, North Macedonia, Romania, Slovenia, and Serbia.
Apart from Romania, Bulgaria and Slovenia were among the EU member states in the region that recorded double-digit growth in FDI inflows last year. In Bulgaria, FDI inflows rose by 32% to 3.2 billion euros, and in Slovenia, by 19% to 1.4 billion euros, according to the report. At the same time, foreign direct investment inflows into Croatia fell from 3.9 billion euros to 2.7 billion euros.
In the Western Balkans, total foreign direct investment inflows fell to 7.9 billion euros in 2025 from 10.3 billion euros a year earlier, though trends varied significantly from country to country. In 2005, North Macedonia, Bosnia and Herzegovina, and Serbia attracted much smaller FDI inflows than in 2024, with the sharpest decline observed in North Macedonia, where FDI fell by 61% to 468 million euros. At the same time, Kosovo, Montenegro, and Albania managed to increase their FDI inflows last year: Kosovo recorded FDI inflows of 1.1 billion euros, 38% more than the previous year, and ranked third in the region in terms of inflow volume after Serbia and Albania.
Moldova, one of the Central and Eastern European countries most vulnerable to security risks and the negative consequences of Russia’s war in Ukraine, also saw a decline in foreign direct investment inflows in 2025 to 408 million euros, down from 427 million euros in 2024.
In 2025, foreign direct investment inflows as a percentage of GDP declined compared to the previous year in most Central and Eastern European countries, with the exception of Kosovo, Romania, Bulgaria, and Slovenia.
However, it’s not all bad
In the first quarter of 2026, only seven countries in Central and Eastern Europe recorded an increase in the volume of capital invested in greenfield projects: the Czech Republic, Montenegro, Estonia, Slovakia, Moldova, Ukraine, and Romania.
The capital committed to announced greenfield projects also declined significantly in the first quarter of 2026 across all subregions—with the somewhat surprising exception of Moldova and Ukraine. Although the number of announced greenfield projects in Moldova and Ukraine declined in the first quarter of 2026, the average value of each project rose by 80% compared to the first quarter of 2025, and, consequently, the volume of capital committed increased by 30%.
In other countries, investment activity declined sharply: in Albania, North Macedonia, Kosovo, Belarus, and Russia, not a single new “greenfield” project was announced during the period under review. Bulgaria and Bosnia and Herzegovina fared only slightly better: the volume of committed investments fell by approximately 90% compared to the same period last year.
The quality of investment in Moldova is lacking
An analysis titled “Foreign Direct Investment: Impact on Moldova’s Economy” (2016–2025), conducted by the Investment Agency of Moldova, showed that the structure of FDI flows in 2025 was determined primarily by profit reinvestment by existing investors, while equity participation and debt instruments made a limited or volatile contribution.
This trend reflects investors’ focus on strengthening existing operations rather than launching new investment projects. At the same time, as noted in the study, the low level of new capital indicates moderate momentum in attracting large-scale investment projects.
Indeed, over the past five years, not a single new major foreign investor has entered Moldova.
As of the end of 2025, the total volume of accumulated FDI in Moldova stood at 5.3 billion euros, representing a 2.6% increase compared to 2024. This trend reflects not only actual investment flows but also external macroeconomic and financial conditions—the figures depend to a large extent on external factors, particularly exchange rate fluctuations and price adjustments. At the same time, the share of accumulated FDI in GDP declined from 40% in 2019 to 29.8% in 2025, which is explained by faster economic growth compared to the accumulation of foreign capital.
The geographic distribution of FDI shows a marked concentration in EU countries: the volume of European capital exceeded 3.1 billion euros by the end of 2025, strengthening its dominant position (€2.9 billion as of the end of 2024). As the study emphasizes, this trend reflects Moldova’s economic integration into the European space, but at the same time points to a high degree of dependence on a limited number of capital sources.
The Largest Investors Are to Blame
Over four quarters, from the second quarter of 2025 to the first quarter of 2026, Germany continued to scale back its investment activity in the region: the number of announced greenfield projects fell by 32%, and the volume of committed capital decreased by 5% compared to the previous year. China also announced fewer projects (down 19%), but increased the volume of committed capital by 84%, mainly due to a major project to produce environmentally friendly aluminum in Kazakhstan.
Even excluding the Kazakhstan project, the volume of Chinese investment still exceeded that of Germany, underscoring China’s growing economic influence in Central and Eastern Europe.
