The Covid-19 pandemic has caused a long-term negative trend of direct foreign investments in Bosnia and Herzegovina, said the Foreign Investment Promotion Agency (FIPA), warning that Bosnia's economy is facing a deep recession.

The analysis carried out by agency chief, Milica Markovic, showed that the direct foreign investments in the world were declining even before the pandemic outbreak due to the insecure trade policies, drop of the incomes from the direct foreign investments and changes in the form of the international production.

It is estimated that the global flows in the direct foreign investments will drop by 40 percent in 2020 compared to the previous years.

“Prior to the pandemic, 79.3 percent of investors said they were planning new investments and reinvestments in Bosnia and Herzegovina in 2020,” according to the analysis.

The agency also carried out a survey among potential investors during May this year and 50 percent of them confirmed they were still interested in resuming the investments that were agreed before the pandemic outbreak, while 40 percent of them said they were likely to postponed the planned investments. Two companies responded they were planning to relocate a part of their business activities outside Bosnia and Herzegovina and one company will completely halt its investments.

“The economy of Bosnia and Herzegovina that was slowing down even before the Covid-19 pandemic is now facing a deep recession. If we take into account the international institutions’ reports on the position of Bosnia and Herzegovina at the global level and add the consequences of the pandemic, it is clear that its effects on our economy will be almost dramatic,” the analysis warned.