Dear Colleagues,
We have just released our latest Global Investment Trends Monitor<https://unctad.org/webflyer/global-investment-trend-monitor-no-38>, with the first full-year assessment for foreign direct investment (FDI) in 2020 and prospects for 2021.
Key findings:
* Global FDI in 2020 fell by 42% to an estimated $859 billion, from $1.5 trillion in 2019. It was more than 30% below the trough after the global financial crisis in 2009.
* The decline was concentrated in developed countries, where FDI flows fell by 69% to an estimated $229 billion. Flows to Europe dried up completely to -4 billion (including large negative flows in several countries). A sharp decrease was also recorded in the United States (-49%) to $134 billion.
* FDI to developing economies declined by 12% to an estimated $616 billion. The share of developing economies in global FDI reached 72% – the highest share on record. China topped the ranking of the world largest FDI recipients.
* Looking ahead, the FDI trend is expected to remain weak in 2021. Data on an announcement basis, an indicator of forward trends, provides a mixed picture:
* Sharply lower greenfield project announcements (-35% in 2020) suggest a turnaround in industrial sectors is not yet in sight.
* Upticks in the fourth quarter of 2020 dampened earlier declines in newly announced international project finance deals (-2% for the full year). International investment in infrastructure sectors could thus prove stronger, buoyed by economic support packages in developed countries.
* Similarly, the 2020 decline in cross-border M&As (-10%) was cushioned by higher values in the last part of the year. Looking at M&A announcements, strong deal activity in technology and pharmaceutical industries is expected to push M&A-driven FDI flows higher.
* For developing countries, the trends in greenfield and project finance announcements are a major concern. Although overall FDI flows in developing economies appear relatively resilient, greenfield announcements fell by 46% and international project finance by 7%. These investment types are crucial for productive capacity and infrastructure development and thus for sustainable recovery prospects.
UNCTAD’s Global Investment Trends Monitors are available here<https://unctad.org/publications-search?f%5b0%5d=product%3A609>. See also our SDG Investment Trends Monitor<https://unctad.org/system/files/official-document/diaemisc2020d3_en.pdf> and our Investment Policy Monitors<https://unctad.org/publications-search?f%5b0%5d=product%3A623>.
The next regular update on investment data will be published in the World Investment Report 2021, scheduled for publication in June.
Best regards,
James X. Zhan
Director, Investment and Enterprise<https://unctad.us6.list-manage.com/track/click?u=3592d5dcafd1b9278dd78095f&id=2483e9d948&e=30a3c54ba5>
United Nations Conference on Trade & Development
Palais des Nations, Geneva
http://www.unctad.org/wir<https://unctad.us6.list-manage.com/track/click?u=3592d5dcafd1b9278dd78095f&id=d89f4c1ea8&e=30a3c54ba5>
http://www.worldinvestmentforum.org<https://unctad.us6.list-manage.com/track/click?u=3592d5dcafd1b9278dd78095f&id=78dbb72279&e=30a3c54ba5>
http://investmentpolicyhub.unctad.org<https://unctad.us6.list-manage.com/track/click?u=3592d5dcafd1b9278dd78095f&id=ee8ddf53a4&e=30a3c54ba5>
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