Investments: strong upturn in Q4, yet no reason to rejoice

160229_Beruh_ENIn the last quarter of 2015, investment rose by a respectable 7% on an annual basis. As a result, the volume of investments grew by an average of 0.6% in 2015 as a whole.

This upturn, however, is not broad-based enough to do much good to the investment prospects for 2016. Business investments continued to contract, by 6.2%. This has much to do with the continuation of decline in manufacturing investments (by 7.1%), but agricultural investments also keep plummeting and investments in wholesale and retail trade also fell in the fourth quarter. Manufacturing investments are apparently still dragged down by the lull in the previously strong growth in automotive investments.

Due to a final push, the spending of the remaining EU funds reached new heights in the last quarter, resulting in a whopping 70% growth in the public sector. This was the main factor behind the overall growth in investments in Q4, and this factor will have an opposite effect this year – due to a temporary substantial fall in the inflow of EU funds in 2016. Apparently the investments of micro and small enterprises also rose in the fourth quarter, and this may hopefully continue in the coming quarters, but on the whole, a slight-to-moderate decline of investments is expected for this year.