The Strategist

UN records decline in global FDI

06/24/2024 - 03:18

A report by the United Nations Conference on Trade and Development (UNCTAD) shows that worldwide foreign direct investment (FDI) flows decreased by 2% to $1.33 trillion in 2023 amid general concern about the prospects for global economic development.
According to UNCTAD data, the amount of foreign direct investment (FDI) flowing globally in 2023 decreased by 2% to $1.33 trillion. Amidst the COVID-19 pandemic, foreign direct investment (FDI) fell by 36% in 2020, recovered in 2021, then fell by 12% again in 2022 as a result of the crisis in Ukraine, totaling $1.3 trillion.

The organization's research notes that investors' uncertainty on the likelihood of economic growth—both globally and in specific countries—had an impact on the amount of foreign direct investment (FDI) in 2023.

The global volume of M&A (mergers and acquisitions) deals fell by 46% against the backdrop of tighter financing conditions, while the volume of project financing fell by 26%. At that, indicators of investor expectations were the primary means of showcasing growth last year: the number of projects slated for implementation in the near future rose by 2% for the first time in a decade, primarily as a result of planned investments in the manufacturing sector. 

UNCTAD observes that while the number of new investment project announcements declined by 6% in rich countries, the improvement in expectations was concentrated in developing nations.


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