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
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