In the first half of 2012, global foreign direct investment (FDI) inflows decline by 8 per cent compared with the same period of 2011. UNCTAD now projects that FDI flows will, at best, level-off in 2012.
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. Compared to full year forecast of FDI inflows published in July, UNCTAD's tenth Global Investment Trend Monitor now project that FDI flows will, at best, level-off in 2012, at slightly below US$1.6 trillion. The slow and bumpy recovery of the global economy, weak global demand and elevated risks related to regulatory policy changes 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, the risk of further macroeconomic shocks in 2013 can impact FDI inflows negatively.
"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.