Drop in global foreign investment but rise in flows to developing world

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UNCTAD anticipates an increase in FDI flows this year due to stronger economic growth in developed countries and lower oil prices. World Bank File Photo/Gennadiy Kolodkin

Foreign Direct Investment fell 16 per cent last year, the UN trade body (UNCTAD) reports.

UNCTAD has released its World Investment Report which puts the 2014 figure at US$1.23 trillion, down from US$1.47 trillion the previous year.

However, the agency notes an upswing in flows to developing countries and says recovery is in sight for 2015 and beyond.

Dianne Penn reports.

Foreign Direct Investment or "FDI" refers to investment made in businesses which operate outside the country of the investor.

UNCTAD attributes the drop in FDI in 2014 to the fragile global economy, policy uncertainty for investors and elevated risks in some regions of the world.

But it adds that increased government measures to liberalize Foreign Direct Investment and a combined fall in restrictions have helped to enhance conditions.

Mukhisa Kituyi is the UNCTAD Secretary-General.

"Inward FDI flows to developing countries reached the highest level ever at $681 billion, representing a two per cent increase. Developing economies now account for 55 per cent of global FDI inflows. Among the top FDI recipients in the world, five are now developing economies."

While the outlook remains uncertain, UNCTAD anticipates an increase in FDI flows this year due to stronger economic growth in developed countries and lower oil prices, among other factors.

Dianne Penn, United Nations.

Duration: 1’09″

 

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