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Dear Sir/Madam, It is my pleasure to share with you the latest issue of UNCTAD's Global Investment Trends Monitor. The key message: FDI flows retreated in the first half of 2012, UNCTAD revises down its full year forecast. In the first half of 2012, global foreign direct investment (FDI) inflows reached US$668 billion, a decline of 8 per cent compared with the same period of 2011, as the economic recovery suffered new setbacks in the second quarter of 2012. The US$61 billion fall was mainly caused by a decline of US$37 billion in inflows to the United States and a US$23 billion fall in inflows to BRIC countries – Brazil, Russian Federation, India and China. The declines were caused by steep falls in both greenfield investment projects (-40 per cent) and cross-border M&A transactions (-60 per cent), which were visible in the reduced importance of the equity component of FDI inflows. The fact that the overall decline remains limited to 8 per cent reflects the stable reinvested earnings component of FDI. Developing countries alone absorbed half of global FDI inflows due to the steep fall in flows to the developed countries. FDI flows showed an uneven pattern among regions. In developing economies, while flows to Asia declined, those to Latin America and Africa rose. In developed countries, the rise in flows to Europe (in spite of a fall in flows to the European Union) and other developed countries was not enough to compensate for the decline in flows to North America. Despite a decline in FDI inflows, China became the world's largest recipient of FDI, in the first half of 2012, followed by the United States. However, early indications show that FDI flows to the United States might be stronger in the second half of 2012. Compared to the full-year forecast of FDI inflows published in July, UNCTAD now projects that FDI flows will, at best, level-off in 2012 at slightly below US$1.6 trillion. The bumpy recovery of the global economy, weak global demand and elevated risks related to regulatory changes continue to reinforce the wait-and-see attitude of many transnational corporations toward investment abroad. For your information, the next issue of UNCTAD's Investment Policy Monitor will be released in mid-November 2012. James Zhan Director Investment & Enterprise Division United Nations Conference on Trade & Development Palais des Nations, Geneva Tel: +41 22 9175797 www.unctad.org/diae Twitter: @unctadwif wir