Dear Colleagues,

It is my pleasure to share with you the key findings on regional investment trends and prospects from this year's UNCTAD World Investment Report 2016:

• FDI flows to Africa fell to $54 billion in 2015, a decrease of 7 per cent over the previous year. An upturn in FDI into North Africa was more than offset by decreasing flows into Sub- Saharan Africa, especially to West and Central Africa. Low commodity prices depressed  FDI inflows in natural-resource-based economies. FDI inflows to Africa are expected to increase moderately in 2016 due to liberalization measures and planned privatizations of state-owned enterprises.
• Developing Asia saw FDI inflows increase by 16 per cent to $541 billion – a new record. The growth was driven by the strong performance of East and South Asian economies. FDI inflows are expected to slow down in 2016 and revert to their 2014 level. Outflows from the region dropped by about 17 per cent to $332 billion – the first decline since 2012.
•  FDI flows to Latin America and the Caribbean – excluding offshore financial centres – remained flat in 2015 at $168 billion. Slowing domestic demand and worsening terms of trade caused by falling commodity prices hampered FDI mainly in South America. In contrast, flows to Central America made gains in 2015 due to FDI in manufacturing. FDI flows to the region may slow down in 2016 as challenging macroeconomic conditions persist.
• FDI flows to transition economies declined further, to levels last seen almost 10 years ago owing to a combination of low commodity prices, weakening domestic markets and the impact of restrictive measures/geopolitical tensions. Outward FDI from the region also slowed down, hindered by the reduced access to international capital markets. After the slump of 2015, FDI flows to transition economies are expected to increase modestly.
• After three successive years of contraction, FDI inflows to developed countries bounced back sharply to their highest level since 2007. Exceptionally high cross-border M&A values among developed economies were the principal factor. Announced greenfield investment also remained high. Outward FDI from the group jumped. Barring another wave of crossborder M&A deals and corporate reconfigurations, the recovery of FDI activity is unlikely to be sustained in 2016 as the growth momentum in some large developed economies weakened towards the end of 2015.
• FDI flows to structurally weak and vulnerable economies as a group increased moderately by 2 per cent to $56 billion. Developing economies are now major sources of investments in all of these groupings. Flows to least developed countries (LDCs) jumped by one third to $35 billion; landlocked developing countries (LLDCs) and small island developing States (SIDS) saw a decrease in their FDI inflows of 18 per cent and 32 per cent respectively. Divergent trends are also reflected in their FDI prospects for 2016. While LLDCs are expected to see increased inflows, overall FDI prospects for LDCs and SIDS are subdued.

Please note that the UNCTAD World Investment Forum 2016 will take place in Nairobi, Kenya, 17-21 July 2016.

With best regards,

James X. Zhan
Director, Investment & Enterprise
Team Leader, World Investment Report
United Nations Conference on Trade & Development
Palais des Nations, Geneva
Tel: +41 22 9175797
www.unctad.org/diae
http://www.worldinvestmentreport.org/