I am pleased to share with you our January Global Investment Trends Monitor – as always containing the first full-year estimates for foreign direct investment (FDI) and preliminary data for cross-border mergers and acquisitions
(M&As), greenfield investment projects and international project finance.
Global FDI flows showed a strong rebound in 2021, up 77% to an estimated $1.65 trillion, from $929 billion in 2020, surpassing their pre-Covid-19 level. However, important nuances are due, with a large part of the increase consisting of financial flows and
M&As rather than new productive investments, with recovery growth highly concentrated in developed countries, and with continued stagnation of SDG investment in the least developed countries (LDCs).
The outlook for global FDI in 2022 is positive, although the 2021 rebound growth rate is unlikely to be repeated. International project finance in infrastructure sectors will continue to provide growth momentum. The protracted duration of the health crisis
continues to be a major downside risk. The speed of implementation of infrastructure investment stimulus is an important factor of uncertainty. Other risks, including labour and supply chain bottlenecks, energy prices and inflationary pressures will also affect
results.
The following are some of the key findings in today’s Monitor:
In developed economies, FDI reached an estimated $777 billion in 2021 – three times the exceptionally low level in 2020. Of the total increase in global FDI flows in 2021 almost
three quarters was recorded in developed regions.
FDI flows in developing economies increased by 30% to nearly $870 billion, with a growth acceleration in East and South-East Asia, a recovery to near pre-pandemic levels in Latin
America and the Caribbean, an uptick in West Asia and moderate rises in most countries in Africa.
Investor confidence is strong in infrastructure sectors, supported by favourable long-term financing conditions, recovery stimulus packages, and overseas investment programmes. The
number of international project finance deals was up 53%, with sizeable increases in most high-income regions and in Asia and Latin America and the Caribbean.
Investor confidence in industry and global value chains remains weak. Greenfield investment project announcements were practically flat (-1% in number, +7% in value). The number
of new projects in GVC-intensive industries fell further.
The recovery of investment flows to SDG-relevant sectors in developing economies remains fragile. The combined value of announced greenfield investments and project finance deals
rose by 55%, but mostly because of a small number of large deals in the renewables sector. The number of SDG-relevant investment projects in developing economies rose by only 11%.
In LDCs, the trend in SDG-relevant investment is less favourable. SDG investment project numbers in LDCs declined by a further 17%, after the 30% fall in 2020.
