ISLAMABAD: Global foreign direct investment (FDI) inflows fell by 19 per cent, in 2018, to an estimated $1.2 trillion — a level comparable to the low point reached after the global financial crisis of 2008, a new report of UN Conference on Trade and Development (UNCTAD) said on Monday.
The latest ‘Global Investment Trend Monitor’ says that the decline was concentrated in developed countries, while FDI in developing countries remained resilient.
Looking ahead, a rebound is likely in 2019 but the underlying trend remains weak, the report says.
On the positive side, green-field project announcements - an indicator of future trends – increased by 29pc albeit from relatively low levels in 2017.
Also, as repatriations abated in the third quarter of 2018, developed countries’ inflows will revert to normal levels. However, increased risks are emerging from recent downward revisions in growth forecasts, policy factors including trade tensions and uncertainty about the global policy environment for investment and the possibility of structurally lower reinvested earnings by the US multinational enterprises (MNEs), the report says.
The decline in 2018 was concentrated in developed countries where FDI inflows fell by 40pc to an estimated $451 billion, mainly due to large repatriations of accumulated foreign earnings by the US MNEs, following tax reforms.
Published in Dawn, January 22nd, 2019