Foreign direct investment plunges globally by 1/3

Investment flows plunged globally by 35 percent in 2020 due to the COVID-19 crisis. Global foreign direct investment (FDI) flows are expected to bottom out in 2021 and recover some lost ground with an increase of 10 percent to 15 percent, according to UNCTAD’s World Investment Report 2021, Report informs referring to.

FDI flows plunged globally by 35 percent in 2020, to $1 trillion from $1.5 trillion the previous year, the report says.

Lockdowns caused by the COVID-19 pandemic worldwide slowed down existing investment projects, and the prospects of a recession led multinational enterprises (MNEs) to reassess new projects.

The fall was heavily skewed towards developed economies, where FDI fell by 58 percent, in part due to corporate restructuring and intrafirm financial flows.

This situation has a serious impact on UNCTAD development expectations, Acting UNCTAD Secretary-General Isabelle Durant said.

While the environment is now better than a few months ago, and the global economy is recovering faster than initially expected, this recovery is uneven and fragile, she noted.

There are positive signs of trade in goods globally, but trade in services is lagging far behind, she added.