Global foreign direct investment flows were down 49% in H1 2020, from 2019, according to a new report by the United Nations Conference on Trade and Development (UNCTAD).
“Investment projects were affected negatively by the pandemic and lockdown, as well as by the recession that has affected all major forms of foreign direct investment. The number of new investment projects decreased by 37%, mergers and acquisitions – by 15%, and the number of cross-border project financing transactions, which are an important source of investment in infrastructure, decreased by 25%,” the UN said.
In addition, a significant decrease in investment volumes was observed in the developed economies. For example, foreign direct investment in North American countries fell by 56% and amounted to USD 68 billion.
For example, in Asia – mainly due to strong performance in China – the decline in foreign direct investment was only 12%. Foreign investment in countries with economies in transition fell by 81% due to a sharp downturn in Russia.
“The outlook remains highly uncertain and will depend on the duration of the health crisis and the effectiveness of policy measures to mitigate the economic impact of the pandemic. Uncertainty is also due to geopolitical risks,” the UNCTAD report emphasizes.
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