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Jan. 20 – The flow of foreign direct investment globally dropped in 2009 but is likely to modestly rebound this year, according to the latest report made by the United Nations Conference on Trade and Development (UNCTAD).
The U.N. agency said foreign investments made to developed economies plunged by 41 percent and those to developing countries fell by 39 percent. Overall, foreign direct investment slowed down by 39 percent to just over US$1 trillion last year from US$1.7 trillion in 2008.
“Nevertheless it is still likely that a modest rebound in flows will take place in 2010, as investment conditions are improving in many countries,” said the U.N. agency. Britain, Sweden, Spain and the United States reported tumbling rates of foreign direct investment indicating that more foreign firms may have opted to delay or scrap plans for mergers and acquisitions deals in those markets.
Based on the U.N. figures, China fared better than most with only a 2.6 percent decrease in FDI compared to a 57 percent drop for the United States. China is now the second largest recipient of foreign investment in the world after the United States.
China also stood out among the BRIC economies with FDI flows to Brazil dropping by 49.5 percent, India falling by 19 percent and Russia slowing down by 41.1 percent.
Germany defied the odds reporting the highest rise in FDI among the developed nations with a surprising 40.7 percent increase from the previous year.
