FDI inflow improves by 66.7% y/y in H1.

FDI inflow improves by 66.7% y/y in H1. The inflows of FDI soared by 66.7% y/y and reached SKK 55.5bn (EUR 1.6bn) in H1, according to the update of the convergence program for the 2006-2010 period. The figure included property participation and reinvested profit and is lower than the SKK 64.8bn, reported by the central bank. The finance ministry explained the solid growth of the foreign investments as a result of the entry of large strategic investors, which draw other projects from subcontractors and associated companies. We should also note that the figure is probably significantly affected by the completion of the privatisation of a 66% state stake in the electricity monopoly SE at the end of April for EUR 839mn. Still, the program underlined that the performance of the foreign investments for the period was somewhat restrained due to the veto on sale of state assets during February-June due to the pending parliamentary elections. The program counts on continued stable inflows of FDIs in the program period, related also to expansion of existing investment projects.