Latest Global Investment Trends Monitor predicts modest progress in 2012, but world economic fragility poses risks
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Geneva, 24 January 2012 - Despite turmoil in the world economy, global foreign direct investment (FDI) inflows rose by 17% in 2011, to $1.5 trillion, surpassing their pre-crisis average, based on preliminary UNCTAD estimates, the organization said today. FDI inflows increased in all major economic groupings ? developed, developing and transition economies.
UNCTAD´s Global Investment Trends Monitor No. 8, released today, takes an early look at 2011 FDI performance. Comprehensive results and analysis of FDI for the year will be provided in the World Investment Report, to be published in mid-July.
The Monitor is available at the following link: http://www.unctad.org/system/files/official-document/webdiaeia2012d1_en.pdf
Developing and transition countries continued to account for half of global FDI in 2011 as their inflows reached a new record high, driven mainly by investments in Latin America (up 35%) and in transition economies (up 31%). Africa, the region with the highest number least developed countries, continued to experience a decline in FDI. Early estimates show that the share of inflows to Africa dropped by a further 0.6 per cent, to a total of 3.6 per cent of world FDI flows.
Inflows to developed countries rose last year, largely due to cross-border mergers and acquisitions. But there was no expansion of investment in productive assets through greenfield projects.
UNCTAD estimates that FDI flows will climb moderately in 2012 to around $1.6 trillion, but will remain short of the all-time peak of $2 trillion reached in 2007.
However, the organization says the fragile recovery of the world economy in 2011 - with growth tempered by the debt crisis in developed countries, the uncertainties surrounding the future of the euro, and rising financial market turbulence - will have an impact on FDI flows in 2012. Both cross-border mergers and acquisitions and greenfield investments slipped in the last quarter of 2011, UNCTAD figures indicate. All these factors suggest that significant risks and uncertainties for further FDI growth in 2012 remain in place.
