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 recovery is unexpectedly strong, but lacks productive
impact.
- Global FDI flows jumped 36% in 2015 to an
estimated US$1.7 trillion, their highest level since the global economic
and financial crisis of 2008-2009.
- A surge in FDI targeting developed economies
(+90%) was the principal factor behind the global rebound. Strong growth
in flows was reported in the European Union (EU) as well as in the United
States where FDI quadrupled, although from a historically low level in
2014. As a result, the pattern of FDI by economic grouping tilted in favour
of developed countries which now account for 55% of global FDI inflows
in 2015.
- However, the growth was largely due to cross-border
merger and acquisitions (M&As), with only a limited contribution from
greenfield investment projects in productive assets. Moreover, a part of
FDI flows was related to corporate reconfigurations involving large values
in the financial account of the balance of payments but little movement
in actual resources.
- Developing economies saw their FDI reaching
a new high of US$741 billion, 5% higher than in 2014. Developing
Asia, with its FDI flows surpassing half a trillion US dollars, remained
the largest FDI recipient region in the world, accounting for one third
of global FDI flows. Flows faltered in Africa and Latin America and the
Caribbean (excluding offshore financial centers) reflecting the plummeting
prices of their principal commodities exports.
- Flows to transition economies continued to
fall (-54%) as tumbling international commodities prices and regional conflicts
undercut FDI. Investment in the region’s two largest host economies, the
Russian Federation and Kazakhstan, fell sharply.
- Cross-border M&As increased by 61% in
2015, while the overall value of announced greenfield investment projects
registered little change from the previous year. There was a decline in
announced greenfield investments in developing economies, pointing to a
growing weakness in MNEs’ capital expenditures.
- Barring another wave of M&A deals and
corporate reconfigurations, FDI flows are expected to decline in 2016,
reflecting the fragility of the global economy, volatility of global financial
markets, weak aggregate demand and a significant deceleration in some large
emerging market economies. Elevated geopolitical risks and regional tensions
could further amplify these economic challenges.
For
the latest issue of the Global Investment Trends Monitor and the UNCTAD
Investment Policy Monitor, please click
here. An in-depth analysis of FDI
trends will feature in the forthcoming World Investment Report 2016, to
be published in June 2016.
With kind regards,
James Zhan
Director, Investment and Enterprise
Team leader, World Investment Report
UNCTAD
Palais des Nations, Geneva
Tel: +41 22 917 5797
www.unctad.org/diae;
www.unctad.org/wir
