FDI Declines In 2009 With Slow Recovery In 2010
October 28, 2009
Global foreign direct investment (FDI) flows have been severely affected by the economic and financial crisis. According to a new report from the United Nations Conference on Trade and Development (UNCTAD)
, inflows are expected to fall from $1.7 trillion in 2008 to below $1.2 trillion in 2009, with a slow recovery in 2010 (up to $1.4 trillion) and gaining momentum in 2011 (approaching $1.8 trillion).
The U.S., along with China, India, Brazil and Russia (the BRIC countries), will likely lead FDI recovery. FDI to the U.S. actually increased in 2008 to $316 billion, up from $271 billion in 2007, due to an increase in loans from parent companies to their U.S. subsidiaries. UNCTAD does not expect a similar surge in intracompany loans in 2009, resulting in a projected decline in FDI into the U.S.
The report noted that the global FDI landscape has changed with a surge of investments to developing and transition economies.Their share in global FDI flows grew to 43 percent in 2008. Specifically, FDI inflows to Africa and to South, East and South-East Asia rose to record levels. Inflows to the Caribbean, Latin America and South-East Europe also increased. However, UNCTAD reports that in 2009, FDI flows to all regions will suffer from a decline.
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