49% dip in global FDI flows in H1’20: UNCTAD

In its latest Global Investment Trends Monitor, UNCTAD said that lockdowns around the world slowed existing investment projects, with there being a 49% plunge in international foreign direct investment (FDI) flows in the first half of 2020. It added that the prospects of a deep recession led multinational enterprises to reassess new projects.

The study noted that developed economies saw the biggest fall, with FDI reaching an estimated US$ 98 billion in the six-month period. This was a 75% drop as compared to 2019. However, the 16% decrease in FDI flows to developing economies was less than expected. This was on account of investment in China. “The FDI decline is more drastic than we expected, particularly in developed economies. Developing economies weathered the storm relatively better for the first half of the year,” UNCTAD’s investment and enterprise director James Zhan stated.

It also added that cross-border M&A values reached US$ 319 billion in the first three quarters of 2020. It said that the 21% decline in developed countries was balanced by the continuation of M&A activity in digital industries. These developed economies account for about around 80% of global transactions.