Global foreign direct investment (FDI) flows are expected to bottom out in 2021 and recover some lost ground with an increase of 10 per cent to 15 per cent, according to UNCTAD’s latest World Investment Report.
FDI flows plunged globally by 35 per cent in 2020, to $1 trillion from $1.5 trillion the previous year, the report says. Lockdowns caused by the COVID-19 pandemic around the world slowed down existing investment projects, and the prospects of a recession led multinational enterprises (MNEs) to reassess new projects.
The fall was heavily skewed towards developed economies, where FDI fell by 58 per cent, in part due to corporate restructuring and intrafirm financial flows.
FDI in developing economies was relatively resilient, declining by eight per cent, mainly because of robust flows in Asia. As a result, developing economies accounted for two thirds of global FDI, up from just under half in 2019.
FDI patterns contrasted sharply with those in new…
Source: Guardian Newspaper