Dear Colleagues,

 

I wish to share with you UNCTAD’s latest assessment of the impact of the COVID-19 pandemic on global investment in the October edition of our Global Investment Trends Monitor.

 

• In the first half of 2020 global foreign direct investment (FDI) flows fell by 49%.

 

• The decline cut across all major forms of FDI: new greenfield investment announcements fell by 37%, cross-border mergers and acquisitions (M&As) by 15% and newly announced cross-border project finance deals, an important source of investment in infrastructure, by 25%.

 

·         Developed economies saw the biggest fall, with a decline of 75% compared to 2019. Inflows into Europe were negative, flows to North America fell by 56%.

• FDI flows to developing economies decreased by 16% ‒ less than expected. Flows were 28% lower in Africa, 25% in Latin America and the Caribbean and 12% in Asia. FDI flows to transition economies were down 81%.

 

• Global FDI is projected to contract by 30-40% for the full year 2020. The rate of decline in developed economies is likely to flatten as some investment activity appears to be picking up in Q3. Flows to developing economies are expected to stabilize with East Asia showing early signs of recovery.  Significant uncertainty remains, with the outlook depending on the duration of the health crisis and on the effectiveness of policies to mitigate the economic impact.

 

• Despite the 2020 fall, FDI remains the most important source of external finance for developing countries. Other sources, including remittances and official development assistance – particularly important for LDCs – are also falling. The overall decline could aggravate external payments problems in developing countries and LDCs.

 

The next edition of the Global Investment Trends Monitor is scheduled for January 2021.

 

Please find the latest issue of the Global Investment Trends Monitor and UNCTAD’s Investment Policy Monitor.

 

Best regards,

 

James X. Zhan

Director, Investment and Enterprise
Lead, World Investment Report
United Nations Conference on Trade & Development
Palais des Nations, Geneva

https://worldinvestmentreport.unctad.org/
worldinvestmentforum.unctad.org
investmentpolicyhub.unctad.org