World Economy: Foreign Direct Investments Slumped by 42 Percent in 2020

Mainly driven by the economic fallout from the coronavirus pandemic, global foreign direct investment (FDI) in 2020 slipped by 42% year-on-year to $859 billion, according to the UN's trade and development body.

Last year's figure was down from $1.5 trillion in 2019, more than 30% below the investment trough that followed the 2008-2009 global financial crisis, the UN Conference on Trade and Development said on Sunday.

The largest decline in FDI was seen in developed countries, plummeting by 69% to $229 billion during the same period.

The US posted a 49% annual decrease in FDI to $134 billion last year. The decline took place in wholesale trade, financial services and manufacturing.

Noting that investment to Europe dried up, the report said FDI flows fell by two-thirds to minus $4 billion in the continent.

Although FDI collapsed in major European economies such as the UK -- FDI fell to zero -- last year, overall performance masks a few regional bright spots, it underlined.

"Sweden, for example, saw flows double from $12 billion to $29 billion. FDI to Spain also rose 52%, thanks to several acquisitions, such as private equities from the United States Cinven, KKR and Providence acquiring 86% of Masmovil," it noted.

Developing economies attracted 72% of global FDI with $616 billion in 2020, the highest share on record, despite seeing 12% decrease year-on-year.

"The fall was highly uneven across developing regions: -37% in Latin America and the Caribbean, -18% in Africa and -4% in developing countries in Asia," it said.

China was the world's largest FDI recipient last year, with flows rising by 4% to $163 billion thanks to a return to positive GDP growth (+2.3%) and the government's targeted investment...