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Fall in global foreign direct investment

Global foreign direct investment (FDI) inflows declined by 8 per cent in the first half of 2012, as the economic recovery suffered new setbacks in the second quarter of 2012, according to UNCTAD’s tenth Global Investment Trend Monitor.  The organisation now projects that FDI flows will, at best, level-off in 2012, at slightly below US$1.6 trillion.

FDI has fallen in the first half of 2012

“Investment leads economic growth but the current trends of investment flows to developing countries, particularly to Asia, are worrisome and the challenge for channelling FDI into key development sectors such as infrastructure, agriculture and the green economy remains daunting” said Secretary-General of UNCTAD, Dr. Supachai Panitchpakdi.

UNCTAD puts the decline down to “the slow and bumpy recovery of the global economy, weak global demand and elevated risks related to regulatory policy changes (which) continue to reinforce the wait-and-see attitude of many transnational companies (TNCs) toward investment abroad.”

UNCTAD’s longer term projections still show a moderate rise. However, they believe that the risk of further macroeconomic shocks in 2013 can still impact FDI inflows negatively.

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Posted in Foreign Direct Investment, UNCTAD

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