UN: "Foreign Direct Investment This Year Expected to Recover 10-15% Compared to Last Year"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] The United Nations Conference on Trade and Development (UNCTAD) has forecasted that global foreign direct investment (FDI) will recover by about 10 to 15% this year compared to last year. Last year, amid the impact of COVID-19, FDI sharply declined in all regions worldwide except for Asia, and it is expected that this year will still not reach the 2019 level.

On the 21st (local time), UNCTAD stated in a report released that FDI, which had decreased globally due to the COVID-19 impact, is expected to recover by about 10 to 15% this year along with the expansion of gross domestic product (GDP). However, it added that the sharp decline from last year will not be fully offset, so FDI this year will still be about 25% lower compared to 2019.

According to UNCTAD, FDI decreased by 35% globally last year. By region, Europe experienced the largest decline with an 80% drop, followed by North America at 40%, Latin America and the Caribbean at 45%, and Africa at 16%. In contrast, the Asia region saw a 4% increase, supported by increased FDI in China, Hong Kong, Singapore, and India.

Earlier, the World Bank and the Organisation for Economic Co-operation and Development (OECD) recently announced that although the global economy contracted by more than 3% last year, it is expected to grow by 5 to 6% this year.