Global foreign direct investment falls 49%, outlook remains negative

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Global foreign direct investment falls 49%, outlook remains negative

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Global foreign direct investment (FDI) flows fell 49 per cent in the first half of 2020 compared to 2019, due to the economic fallout from coronavirus.
Niti Kiran

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Cross-border M&A values reached $319 billion in the first three quarters of 2020. The value of greenfield investment project announcements - an indicator of future FDI trends - was $358 billion in the first eight months of 2020. The number of announced cross-border project finance deals declined by 25 per cent, with the biggest drops in the third quarter of 2020.

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Developed economies saw the biggest fall, with FDI reaching an estimated $98 billion in the six-month period - a decline of 75 per cent compared to 2019.

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Meanwhile, the 16 per cent decrease in FDI flows to developing economies was less than expected, mainly due to resilient investment in China.

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The FDI flows are expected to decline 30 per cent to 40 per cent. The rate of decline in developed economies is likely to flatten as some investment activity appeared to be picking up in the third quarter and flows to developing economies are expected to stabilise.
Story: Niti Kiran
Design: Pragati Srivastava