UNCTAD: Global FDI falls by 49%

According to a 27 October report released by United Nations Conference on Trade and Development (UNCTAD), global Foreign direct investment fell by 49 per cent to $399 billion in the first half of 2020.  

According to the report, developed economies saw the biggest fall, with FDI reaching an estimated $98 billion in the six-month period – a decline of 75% compared to 2019. 

The trend was exacerbated by sharply negative inflows in European economies, mainly in the Netherlands and Switzerland. FDI flows to North America fell by 56% to $68 billion. 

Meanwhile, the 16% decrease in FDI flows to developing economies was less than expected, due mainly to resilient investment in China. Flows decreased by just 12% in Asia but were 28% lower than in 2019 in Africa and 25% lower in Latin America and the Caribbean. 

In the six months to June 2020, developing countries in Asia accounted for more than half of global FDI. Flows to economies in transition were down 81% due to a strong decline in the Russian Federation.      

The decline cut across all major forms of FDI, the report shows. 

However, China was bucking the trend, with FDI flows relatively stable at $76 billion in the first half of the year, while Hong Kong bounced back as an FDI destination after a weak 2019.   

“Overall investment flows into China remain at a high level and this is partly because China was one of the very few countries, among the first, to control the pandemic and to resume its production system in the country.   

“In the meantime, the Chinese government put in place effective measures to retain investment, to service operations of the multinationals operating in the country, and also put in place new measures to attract investment”, Mr. Zhan said. 

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